Leading Edge 2019 | Keynote by MoS Hardeep Singh Puri
Urban Affairs and Housing and Civil Aviation minister Hardeep Singh Puri does not believe India is facing a severe slowdown, but says it’s just a course correction, at #LeadingEdge2019.
#LeadingEdge2019 #HardeepSinghPuri #CivilAviation #OutlookBusiness #OutlookMagazine #OutlookGroup
#LeadingEdge2019 #HardeepSinghPuri #CivilAviation #OutlookBusiness #OutlookMagazine #OutlookGroup
Category
🗞
NewsTranscript
00:00 Thank you very much. Let me start by thanking Outlook Business, IDFC Bank and all of you
00:14 here this afternoon for providing me an opportunity to share some of my views. In the interest
00:23 of full disclosure, I started my professional life in Mumbai when I joined the private sector
00:32 in the year 1973. I left it within a few months to take up a teaching job in Delhi University
00:42 and then joined the Indian Foreign Service where I served 39 years. Since this session
00:52 is all about the economy, I should also place on record that I have been two years plus,
00:59 two years, three months, Minister for Housing and Urban Affairs and for the last four or
01:05 five months, I have also been Minister for Civil Aviation and Commerce and Industry.
01:12 So all three portfolios, directly and indirectly, deal with issues with which you all are preoccupied
01:22 with. Since the time available to me is not unlimited, I just want to pick on a few issues
01:33 that I think are relevant in understanding the current economic situation and also to
01:42 see how we are to navigate the way forward. I am particularly fortunate that the head
01:48 of the IDFC Bank set the tone and provided a perspective. I am broadly in agreement with
01:58 his conclusions but since I am not a banker, I view the process from the point of view
02:05 of a former diplomat and now somebody who is in public life. I think he got the timing
02:14 almost right. The genesis of what we are dealing with today started with what was then termed
02:22 as the world economic and global economic and financial crisis. This hit the stage,
02:29 the global stage, if I remember correctly, sometime in 2008. That was a time when the
02:36 finance ministers of the G20, as it became later, were meeting in Sao Paulo in Brazil
02:48 to grapple with a new situation which they did not fully comprehend. And that situation
02:54 arose from the real estate sector in the United States and particularly one small segment,
03:04 the subprime lending sector. What happened is that whether you wanted a loan to buy a
03:11 property there were bankers, given the liquidity that was available, or other people in that
03:17 industry who were chasing people to provide that money. And that bubble ultimately affected
03:25 not only the United States, and you have a long list of those whose obituaries were written,
03:31 financial institutions, but then it affected Europe, it affected large parts of Asia, and
03:37 we remained unaffected largely on account of the fact that we were not sufficiently
03:42 integrated in the global market. I want to view this proposition slightly differently.
03:52 As a student of global economic development, having served in different parts of the world,
03:59 some of which were named by the young lady who was introducing me, I have never come
04:04 across a situation where economies, individual economies or groups of economies or the global
04:10 system grow in perpetuity for all times to come. The way I look at it, the last 11 years
04:17 we have seen expansive growth. By and large, I think our friend from the IDFC bank gave
04:26 you the figures. So if you expect that there is to be a growth without course correction,
04:37 a growth which is immune from what is happening in the global scenario, I think that's wishful
04:44 thinking. So compared to where we started and where we are going, I think we haven't
04:51 done too badly. For instance, what are the hard facts today? As Minister for Urban Affairs,
05:00 I deal with public transport. Today in India we have a metro network which is close to
05:08 I think about 687 kilometres. It is world class. In Delhi alone we have about 370-380
05:16 kilometres of metro. It is a first class asset. It compares with the best metro systems in
05:22 the world. It is also affordable. We have another 900 kilometres of metro under construction.
05:29 Why am I providing this fact to you? Because when I became Minister for Housing and Urban
05:34 Affairs on 3rd September 2017, metro fares in India had not risen for nine years for
05:45 a variety of reasons. Six months earlier or rather a few months even before that, a fare
05:55 fixation committee decided that the metro fares needed to be raised because you had
06:00 borrowed money to construct this world class asset and that loan had to be repaid. So the
06:06 fare fixation committee decided that the metro fares would go up but in two segments because
06:13 they had not been raised for nine years, so instead of doing it in one go, the first raise
06:17 came in May 2017. I became Minister in September. So we have a populist government in Delhi
06:25 which believes in providing free bus rides, free electricity, free everything. I hope
06:33 you have saved that prospect in Mumbai. But I am coming to a simple thing. When the second
06:39 instalment had to take place in October, there was a hue and cry. Well, uneducated minister,
06:47 he has been a civil servant, he doesn't know how it runs, he must stop this fare hike.
06:52 And I had a very simple answer. This is a statutory body presided over by a judge of
06:58 the Delhi High Court, retired judge, and there is nothing that the Chief Minister of Delhi
07:02 or the Union Minister can do in terms of fare fixation. Because if you were to make the
07:09 Chief Minister of a state in charge of fare fixation or a Union Minister, fares would
07:13 never go up because a politician typically will pander to populist pressures and make
07:20 everything free. So luckily it's been insulated from that madness. Anyway, to cut a long story
07:26 short, there was a lot of hue and cry. The ridership on Delhi metro in September of 2017,
07:35 when the second phase of the hike was to take place, was 2.4 million or 24 lakhs. And then
07:45 we were told metro has been destroyed, it's going empty, pollution levels are going up
07:49 because people can't afford to go by the metro. Do you know what the ridership on metro today
07:54 is in Delhi? It was 2.4 million then, sometimes it's 6.5 million. Or even on the lower rates,
08:03 60 lakhs a day. I'm making a very basic point, when you talk about the slowdown in the automobile
08:10 industry, I'm not sure that there is a slowdown in the automobile industry. I'm coming to
08:14 that because many of you know more about the automobile industry. I read a very interesting
08:19 piece this morning, when they said bring the cost of ownership down. Yeah, cost of ownership
08:23 you can bring down. But whenever you increase the public transport availability and you
08:34 provide last mile connectivity, as in New York, I lived many years in New York, nobody
08:39 takes out his personal car in New York. You take public transport, Uber, Ola. So I'm just
08:48 making a simple proposition. If the automobile industry figures are down 1% or 1.6%, put
08:55 that on one side, on the other side you take metro ridership which has gone up from 2.4
09:00 million to 6 million or 6.5, also in that same graph you put the rise in this so-called
09:07 radio cab system, Ola and Uber. And please tell me after that, if that is a structural
09:14 slowdown of what it is, let's try and analyse it. And the auto industry people themselves
09:20 are divided on what it is. I don't want to go into where the sense 6 is going etc. But
09:26 I'm trying to understand the phenomena. Our friend from the IDFC bank spoke about the
09:35 construction sector. I know a little bit about it because I deal with it 24 hours in a day.
09:41 What was the problem in the construction sector? First of all the sector is important, make
09:47 no mistake. After agriculture it is the second largest sector, it provides very high percentage
09:54 of the GDP, it is the second largest employer after the agriculture sector. But what was
10:02 the situation in terms of urban housing? Since we are in a group of mature adults, I think
10:13 it is good to acknowledge what the reality was. The reality was that we had a very strong
10:22 parallel economy where the proceeds of under-invoicing and over-invoicing found themselves into gunny
10:30 bags and people rather than keep those gunny bags full of cash at home, would find out
10:39 through their contacts as to who a builder or a supplier or a promoter is, they would
10:45 take those gunny bags to that person and say, agli baar jab aap project karenge do flat
10:50 humare naam bhi kar dijiye. I don't think the builder or promoter ever counted the cash
10:57 in the bag. There were some very good builders, some very good promoters, some very good projects
11:07 which got built but a lot of people saw a lot of money available and they said let's
11:14 make merry, they utilised those funds in order to invest in land banks. So what happened
11:21 is a lot of money went into land banks and price of land started falling and a host of
11:27 things started and there was a huge mismatch between what was required. Some very genuine
11:35 people got affected, people who had put their entire life savings into that sector, they
11:43 borrowed from banks, projects could not be delivered. We are trying to deal with the
11:48 aftermath of that situation. And let me tell you that's where the good news is. That's
11:53 where the government brought in the Real Estate Regulation Act or RERA. When the Act came
12:00 into being, a lot of people said it's not good enough, they challenged it. But the people
12:06 who challenged RERA were not the people who didn't think it was good enough, it was the
12:10 people who challenged it were the people who were benefiting from that culture of impunity
12:15 which prevailed and they were happily distorting the system. So all the challenges the Supreme
12:22 Court took and sent into the High Court of Mumbai. I just become a minister and people
12:29 told me what happens if RERA is struck down. I said I'll bet my bottom dollar if I had
12:34 one that the judiciary will uphold RERA because it is so obvious. Anyway, RERA has come into
12:41 being. It has started the process of ensuring good governance through greater transparency
12:49 and accountability. It regulates and promotes the real estate sector. It protects the interest
12:56 of consumers. It brings a smooth flow of information between the promoter and the purchaser. It
13:02 brings uniformity, professionalism, accountability and standardization in business transactions
13:09 and practices in the sector. It establishes a mechanism for fast-track dispute resolution
13:15 and ensures a fair play and infuses transparency and reducing frauds. I want to place on record
13:22 whilst I'm speaking in Mumbai that MaharERA or Maharashtra RERA in particular headed by
13:29 my friend Gautam Chatterjee has been particularly successful. There are other states which have
13:34 done well also. Now we are in a situation where we have taken many other steps and I'll
13:42 just run through them because this gives me an opportunity to bring home to some of you
13:46 who may not be familiar with this. We introduced an amendment to the Benami Transactions Prohibition
13:54 Act 2016. We introduced a system of online building permissions where we have jumped.
14:02 We used to be 181 positions. You know the world has in the UN 193 countries. We were
14:09 listed at 181 in 2017. We jumped to 52nd position in 2018 and in 2019 we are down to 27th position.
14:19 I take great pride in this because this was done by me personally. The idea is that if
14:24 you are asking for permission, do it online. You don't have to face somebody who will get
14:31 you into a discussion which is irrelevant or not relevant to the project and it's working.
14:38 I also read a report and a comment somewhere that at this current rate there are only five
14:42 or six countries in the world which are better than us in that. So it's been a very good
14:47 story. This online business permission was introduced in Delhi and Mumbai in April 2016.
14:56 Then I took it to our 500 Amritsar cities where we had 440 cities and all 13 states
15:02 and UTs and it's going to be implemented in all cities in India by December 2019. My friend
15:12 from the IDFC bank and he will forgive me if I am referring to his, he's laid out a
15:16 perspective and I'm picking on pieces. He spoke about the Pradhan Mantri Awas Yojana.
15:23 Those of you who live in Mumbai and live in, where God has been kind to you and live in
15:29 apartments which are valued in crores rather than in lakhs, let me tell you there is another
15:34 part to India and a part which I deal with. The Prime Minister decided after he was first
15:43 elected in May 2014, he decided that by the year 2022 when India will celebrate its 75th
15:55 anniversary as an independent nation, every Indian no matter where he or she lives will
16:02 have a house which he or she can call their own. It should be a pakka dwelling with a
16:08 kitchen, a shawchala or a toilet. It should be built to green standards. So the ministry
16:16 did a survey, an assessment survey, how many homes would you need to build in order to
16:23 make sure that every Indian has a home by the year 2022. He didn't stop there. He said
16:29 the title of the home will be in the name of the lady of the house, a major step for
16:35 gender empowerment. Why did the Prime Minister take that step? For a very simple reason.
16:42 Anyone who knows our social structure knows that in the case of marital discord or any
16:48 other problem, it is the lady of the house who will be short-changed. So if you give
16:57 the title to the lady, it may alter the balance and believe me it's working. Not only because
17:04 feminist groups have welcomed it, but I'm saying in practice all states are enthusiastically
17:10 implementing it. If not in the name of the lady of the house, the lady has to be at least
17:15 co-jointly holding the title. So the assessment which was done is that you needed to construct
17:22 1 crore or 10 million homes by the year 2022. We have what is called a committee to monitor
17:34 and sanction projects. That committee in my ministry is headed by the secretary in the
17:39 ministry. We are implementing the Pradhan Mantri Awas Yojana, our affordable housing
17:46 scheme through four verticals. I just spent 30 seconds on each vertical. The first is
17:52 the in-situ slum rehabilitation where large informal settlements, I prefer to call them
17:58 informal settlements rather than slums, come up in the heart of cities. Why? Because poor
18:04 people come there from rural areas, from other cities looking for work, they find the work
18:08 there and invariably set up informal settlements or what you call slum-like conditions. So
18:16 there is that vertical. The second one is what is called a credit link subsidy scheme,
18:24 which is an interest subvention. You are a young upwardly mobile professional, you want
18:30 to buy an apartment, your first apartment, husband and wife are earning, you go to a
18:35 bank and my friend from IDFC bank or somebody will typically charge you 12% or 13%, whatever
18:41 the rate at that point of time is. If you avail of a facility here, the government under
18:46 this vertical will give you 3% upfront as a payment. So that brings the cost of borrowing
18:52 down. The third one is beneficiary-led development. This happens in places like Goa, you have
18:59 a traditional family home, you have not had an opportunity to refurbish, not refurbish
19:07 as an internal, but to do up the repairs and so on, the government will give you a small
19:13 amount of money upfront to spend. And the fourth most important is affordable housing
19:17 and partnership, where the government will provide land, which typically is always 40-50%
19:23 of the cost of an apartment. Then the state government and the central government will
19:27 give you some money, 1.5 lakhs each. And all these four verticals are doing exceptionally
19:33 well. Well, let me give you the good news. We were supposed to sanction 10 million by
19:40 2022. We have a meeting which takes place every month. In September, if not October,
19:48 because we are now in November, maybe October figure, we had already sanctioned out of 10
19:53 million, 9.3 million out of 10 million, already done. And once you sanction it, the grounding
20:01 takes place straight away. When the grounding takes place, it's in a question of 18 months
20:07 with the technology. We have already grounded about 6 million, about 3.2 million have already
20:12 been handed over. The point I'm making is well before 2022, two years at least in advance,
20:21 all 10 million will be not only handed over, completed and handed over. And this is a section
20:26 where there used to be a lot of problem. Now, when we started implementing the scheme, a
20:32 lot of people turned around and said that this cannot be done from budgetary resources.
20:36 It fell on me when I became a minister to realize that. Because the budgetary allocation
20:40 from the finance ministry, in variable was 6,000, 8,000 crores. You don't construct 1
20:45 crore houses with 6,000, 8,000. So one of the first things I did was to go to my boss
20:51 and tell him that this is a huge flagship program. It requires a new solution. And we
20:57 were very lucky that extra budgetary resources of 60,000 crores were approved by the cabinet
21:02 in February 2018. And in the last year, 1920, this one, 20,000 crores has been budgeted
21:11 for. So it's when we were able to access this kind of funds through EBR that we were able
21:17 to implement the scheme. Other things which have been done, I'll conclude that, then I
21:23 want to make some comments on housing, real estate and go into civil aviation. We provided
21:31 infrastructure status to affordable housing in the harmonized list of infrastructure in
21:37 March 2017. The cap on affordable housing units eligible for priority sector lending
21:44 was also raised. We eased the FDI norms for real estate and brought 100% FDI under automatic
21:52 route in construction projects, which includes townships, residential, commercial premises,
21:58 roads and bridges, educational institutes, recreational facilities, et cetera. Fiscal
22:05 and financial measures, GST for under construction affordable housing projects was reduced from
22:11 8% to 1%, with no input tax credit. And for other housing projects, it was brought down
22:18 from 12% to 5%. In the interim budget for 2019 and '20, which was presented on 1st
22:28 February this year, we did several other measures, including benefits under section 81(b)(a)
22:35 of the Income Tax Act. The TDS threshold on rental income was raised from 1.8 lakhs to
22:41 2.4 lakhs. And I have a series of steps which were taken, including most recently, when
22:51 a stress fund of 25,000 crores was set up for completing projects which are in that
22:58 limbo area. Corporate tax rates were slashed to 22% for domestic companies and 15% for
23:05 new domestic manufacturing companies. We have set up, as I mentioned, an alternate investment
23:13 fund, et cetera. If you ask Credai or Noretco, which I deal with on a daily basis, I would
23:20 say that almost everything that they have asked for, we have responded to positively.
23:28 Before I came here, one of the sponsors of the event suggested something else to provide
23:33 a ready solution for those housing projects which don't come under the affordable housing
23:39 orders. My immediate response was, send me a proposal and if it's workable. In other
23:45 words, you have a government which is committed to addressing the challenges, the stress points
23:51 in this sector and I have absolutely no doubt that it's not the gloom picture which is being
23:58 made out to be. I read a report yesterday that cement and steel prices are picking up.
24:05 Now if you look at the history of this period, the slowdown or the so-called imaginary slowdown
24:09 started when cement and steel prices started showing adverse trend. So I think, I don't
24:17 know how many quarters it's going to take. Nobody has a magical woman but if you look
24:21 at the inventories are coming down. There are other positive signs in the marketplace.
24:28 The narrative I suspect in the housing sector, certainly where I live in Delhi, is being
24:34 largely shaped by three large projects in the national capital region. These are three
24:42 large projects which are either before the NCLT or the Supreme Court is directing them
24:47 and I think they are also the good news is that under the court's direction we are getting
24:54 a way forward. Why does this take place? This kind of a problem? Is it man-made? Is it structural?
25:03 I must submit to you with all humility that this is a crisis created by the stakeholders.
25:11 And it's a crisis which could have been avoided if we had a regulator in the sector initially,
25:17 if we had some discipline. I mean most countries in the world, people have money, borrow money
25:22 from a bank and go and get a ready-made project. But because promoters and builders did not
25:27 have access to finance, they resorted to this and some practices which are not healthy came
25:33 into being and when demonetisation came and GST came, as my friend from the IDFC said,
25:40 he didn't use these words but I'm going to use them, there was blood on the floor but
25:44 we are mopping it up now. And the good news is that this sector, like this sector in other
25:50 countries, I mean if you look at what we are doing in Delhi, we are going to confer ownership
25:56 rights to 40 lakh people who live in unauthorised colonies. We are building the entire central
26:02 vista in Delhi. I mean Rashtrapati Bhavan, North and South block and Parliament will
26:06 remain intact, all the other buildings which should never have been built in the first
26:10 place but which are not energy efficient, which don't conform to modern energy efficiency
26:18 standards etc will be rebuilt. So construction in most countries in the world is a great
26:23 critical driver of growth and believe me that's the situation in India and if you guys are
26:27 in that sector, I think you are looking at a win-win in a shorter period of time than
26:34 you imagine. I mean I was very impressed with the figures that my friend from the banking
26:39 industry gave because much of that what we perceived to be growth was the easy liquidity
26:45 which was available and instead of using that easy liquidity properly, we went and splurged,
26:51 we didn't do it here, it happened in the United States, that's how the global financial and
26:54 economic crisis also set up. I want to go away from a minute from construction to civil
27:00 aviation. Again the narrative I think when you have bad news, the narrative gets exemplified,
27:10 when you have good news, people are a little more sober. Let me start by giving you first
27:15 the negative news and then show you how quickly we have recovered. A major Indian airline,
27:23 Jet Airways went or rather seized operations, I don't want to use my words very carefully
27:30 because the matter is still before the appropriate authorities. When Jet Airways seized operations,
27:37 we had something like 570 or 80 aircraft, civil aviation aircraft in the skies operating.
27:48 My own view and I maybe should not be talking like this, I think Jet Airways could have
27:52 been saved but Jet Airways could have been saved provided one of the promoters was willing
27:59 to have it saved. Again I became minister a few months later, I think Jet Airways seized
28:08 operation in April of 2019. Well let me fast forward as they say, today we have 690 aircraft
28:17 flying as against a 580 when Jet, nobody talks about Jet Airways this thing but when I become
28:24 civil aviation minister in September, everybody said civil aviation is going. What is the
28:28 problem in civil aviation? First let me give you the good news. We are looking at 690 aircraft
28:33 today, one of our airlines has just ordered 300 aircraft. 300 is probably one of the largest
28:41 aircraft orders placed ever. I think we are looking at something like 2000 civil aviation
28:50 aircraft, Indian in the skies before long. When I joined the Indian foreign service in
28:58 1974 and I went on my first posting to Tokyo in 1975, Delhi airport used to be called Palam
29:06 International. It's called Indira Gandhi International Airport today. It used to handle annually
29:13 1.9 million passengers. Today ladies and gentlemen, Indira Gandhi airport in Delhi handles 70
29:23 million people, passengers in a year, from 1.9 to 70 million. The airport operator tells
29:29 me that he is taking it up to 110 million with a fourth runway coming in. My own view
29:35 is that 70 could become 80, you have capacity constraints. We are building another airport
29:42 in Jeevar for which the bids have already come. When Jeevar is operational in 3 or 4
29:46 years from now, and there are 4 very good bids I am told, Delhi Indira Gandhi International
29:52 Airport and Jeevar airport together will handle more than 140 million which is the largest
29:58 conglomerate of Hydro, Gatwick and Stansted. Today we have 100 airports, in 2 years time
30:05 we will have 200 airports, 35 of them are dealing with international traffic, we will
30:09 have 200 airports with 70 of them dealing with international traffic. With just a 7%
30:14 penetration, which means out of 100 Indians only 7 fly, but when you transit from being
30:21 a 2.89 trillion dollar economy to a 5 trillion dollar economy, the penetration rate will
30:26 go up in a massive manner. Before coming here I was asking my Joint Secretary who deals
30:31 with UDAAN, which is the regional connectivity scheme, and she was telling me that they have
30:37 just done the bidding for the 4th round, we have already added something like 25 lakh
30:41 passengers, this will go up. My view is that out of the 340 million or so passenger throughput
30:47 that we are talking about, we are looking in the short 3 to 5 year period of a billion
30:53 passengers and civil aviation along with construction will be the critical drivers of economic growth
31:02 in India. Now one concluding comment I want to make, this is a reality, when I got up
31:08 in Parliament to talk about one of these developments, some honourable members, which is why Parliament
31:17 is such an exciting place, tried to heckle me, oh no you got your business model wrong,
31:21 I said wait a minute, wait a minute, it's not that I got my business model wrong or
31:25 Indian air carriers got their business model wrong. This is a global phenomenon, the guys
31:31 who make the engines, ok, whoever makes the engines, Rolls Royce, Pratt & Whitney, General
31:37 Electric, an engine is about 40% plus of the aircraft value, they laugh their way to the
31:43 bank, even when their engines have faults and they are correcting them, but we put that
31:48 aside. The guys who manufacture aeroplanes like Boeing and Airbus, they are always laughing
31:55 their way to the bank. The guys who run the airports, and I forgot to give you the favours
31:59 of Mumbai, Mumbai airport today handles more than 50 million passengers and with this Nadar
32:04 airport, Navi Mumbai coming up, it's going to be again, we are looking at 80 million
32:08 or plus this thing, so 140 million here, 80 million here, you are looking at a replacement
32:13 of the hubs which have come up around India to be within India and if I can do that in
32:18 Hyderabad and Bangalore also, it's going to be a completely new ball game and incidentally
32:22 when airports come up, construction activity also shoots up. You know, the guys who run
32:28 the airports make money, the tourist industry, Ola, Uber, hotels all make money, you know
32:33 who loses money? Only the airlines themselves, not an Indian phenomena. When I was questioned
32:42 in Parliament, I said look I can give you a long list of American carriers, flagship
32:46 carriers, Pan American, TWA and if anybody has got a little recollection, North West,
32:53 South West, why does this happen? There is something in the business model. My daughter
32:59 told me 20-25 years ago, she is in the financial industry, she said you know airlines will
33:04 always have a problem because of the business model. Why? It's a high capital, capital intensive
33:10 industry. We are not able to handle, I am trying to sort it out, you know handle jet
33:18 aviation fuel, how do you price it? Frankly you need to price jet aviation, but there
33:22 is another problem. When you have a successful sector, the competition which you require
33:28 to keep prices stable sometimes acts in a counterproductive way. Let me explain what
33:33 I am saying. You know what the fare on the trunk sector Mumbai Delhi was 20 years ago?
33:42 5100 rupees. Do you know what it is today 20 years later? It is 4600 rupees. How is
33:48 that possible? It is possible only because these low cost carriers are competing against
33:54 each other and dumbing the thing down. So we have to now also start worrying about ensuring
34:01 that our airlines or the airline operators, they are kept viable. Now there is a dilemma
34:11 here. As a person in, you know, who has something to do with governance, we should be wanting
34:17 airlines travel to be made more affordable. But there is a way of doing it. When I was
34:22 a young language officer in Tokyo, my first posting, my favourite example is I once asked
34:30 a Japanese watch manufacturer, I said how will you compete against the Swiss because
34:34 they have got you know hundreds of years of watch making skills and marketing skills at
34:40 their disposal. He told me something very interesting. He said we took a map of the
34:44 world. There were three major suppliers at that point of time. He said we divided the
34:49 world into three zones, A, B and C. Since Seiko was the senior partner, we told him
34:55 you decide which one you want. This is hypothetical. He decided he wanted Western Europe and the
35:01 United States which was the big market. So Seiko took that. Out of the remaining two,
35:05 Orient and Citizen, the other two took. So they organised themselves. I have absolutely
35:13 no doubt if our four low cost carriers sit down together, there is enough money with
35:19 the growth which is going to be made for all four to be successful. But on the other hand
35:22 if they compete against each other, then there will be, you know, it's like countries trying
35:27 to provide incentives on attracting foreign direct investment and outdo each other in
35:31 a counterproductive way. Look, I am optimistic to the point of being bullish about the Indian
35:38 economy. So when people come and tell me, "ye ho gaya, wo ho gaya", I was very happy
35:43 that a friend from the IDFC showed where have we come and where are we going. We are with
35:52 all the problems that come our way. Why am I optimistic? One, I think much of this has
36:03 something to do with the global environment. Now that's no excuse. If the global environment
36:09 is positive, if oil prices are very low, you take advantage. If the global environment
36:14 becomes less than conducive, you adjust to it. There are both individual gainers and
36:21 losers in that game. But I am confident because of two reasons. One, the Indian entrepreneurial
36:28 spirit has not been, it's not. Some flight of capital takes place, some people look at
36:34 short term games, want to relocate etc. But for every story like that, I have got ten
36:40 success stories. A friend from the IDFC provided, I came across a story the other day where,
36:46 and this is my sector because I deal with public transport. Two youngsters got together,
36:52 looked at a gap which existed in the urban transport. They said, "You know, if you have
36:58 a metro line coming up to here, you need last mile connectivity." With something like 25
37:04 crores, they started a business and they are laughing their way to the bank. I mean in
37:07 a few years' time, they are 2,500 crores. So there is going to be always all these things
37:12 happening. When do we start seeing the turnaround etc.? I am not a soothsayer, but all I can
37:18 tell you is, if you look at all the positive signs, green shoots, recovery etc., it's not
37:25 something that I would worry about. What I would agonize about more intently is let us
37:32 get an understanding of the causation right. Because once you understand why I think it's
37:36 taking place, you can correct it. And I think you have in Mr. Modi's government, a government
37:42 which has gone from the corporate tax rate being the highest in the world to the lowest
37:45 in the world. So when somebody tells me, "Well look, this is the strain," my response then
37:50 is always, "Well, give me a solution, which is a solution which is doable in terms of
37:56 not putting a strain on something else in the economy." So thank you very much for sparing
38:00 the time and as I said, I started my professional life in Mumbai and it's always good to be
38:08 back here in a city which is both vibrant and will always be the commercial capital
38:14 of India. Thank you very much.
38:16 [Applause]
38:18 [Music]
38:20 [Music]
38:22 [Music]
38:24 (upbeat music)
38:26 (whooshing)