Sikkim rail project: Is it development or disaster waiting to happen?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bishnu Rai gets emotional every time he tries to speak about his home. Especially since he’s on the verge of losing it.

Thirty-one-year old Rai lives on a hilltop in Melli town in landslide-prone Kalimpong district of northern West Bengal.

The small cluster of three huts on the eastern Himalayan hilltop has been home to his family for over five decades after they moved here from neighbouring Nepal. But a railway project that aims to connect Sikkim with the rest of the country is likely to rob Rai of his home and the many memories that fill its every nook and corner.

“We are not against development,” says Rai, adding, “However, this project will wreak havoc on the hills and forest, inviting natural disasters. We depend on the forest for our livelihood and its destruction will affect us. Work on the project has started in some pockets in the area but we have not allowed the railways to start construction on the hilltop until the Forest Rights Act(FRA), 2006, regulations are properly followed.” The FRA mandates taking permission from gram sabhas before undertaking any project in forest areas, which Rai claims hasn’t been done for this project.

A crucial link for Sikkim

The nearly 45 kilometers-long Sivok-Rangpo rail project, considered to be an engineering marvel, aims to connect Sivok railway station in Darjeeling district in West Bengal to Rangpo in East Sikkim with a single broad-gauge line.

The train route will pass through tunnels and bridges. The stretch will have 14 tunnels, 14 major bridges and eight minor ones and five stations – Sivok, Riyang, Teesta Bazar, Melli and Rango. Teesta Bazar will be an underground railway station. The longest distance between two stations will be around 17.6 kilometres, between Melli and Rangpo. The length of the longest tunnel will be around 5.13 kilometres and the longest bridge will be around 375 meters.

It is being speculated that the project is part of an ambitious plan of the central government to extend railway connectivity to Nathu La mountain pass, in the Himalayas in East Sikkim district, and counter the development projects rolled out by China on the border. The connectivity would also help in mobilising the army in the event of any hostile situation developing with China.

“It would be too early to talk about the connectivity with Nathu La as it is the final phase. The second phase will be to reach till Gangtok in Sikkim. At present, our focus is to complete the first phase as early as possible,” says T.T.Bhutia, general manager, project head, Indian Railways Construction Company Limited (IRCON), the implementing agency of the project.

In 2009, a Memorandum of Understanding (MoU) for the project was signed between the West Bengal government and then Union Railway Minister Mamata Banerjee. On 30 October that year, Banerjee and India’s then Vice-President Hamid Ansari laid the foundation stone of the project.

Banerjee had assured that the project would be completed in five years. However, according to railway officials, difficulty in obtaining land clearances from villagers has been one of the main reasons for the delay. Railway officials made it clear that another five years would be needed after obtaining all the land needed.

Estimated to cost around Rs 1,339.48 crores when it was sanctioned in 2008-2009, the project touched Rs 4085.69 crores in 2015 due to the delay. In 2017, the railways started construction and around 750 meters of the tunnel has been dug so far – 500 meters in Rangpo and the rest in Lohapool, West Bengal.

At what cost?

Although railway officials peg the number of houses that will be lost to the construction of this line at 72, villagers in Melli claim that nearly 800 houses will be destroyed.

“We fear the entire village would be destroyed because heavy machines would need a larger area for work and all houses in their path will be demolished. The construction will also cause massive pollution. The tunnels will impact our groundwater sources that give us our supply for drinking and other daily uses,” says Rambahadur Rai, 69, who lives close to the hilltop.

Villagers living in Rangpo, a part of which also lies in West Bengal, have demanded the stringent implementation of FRA, 2006. The villagers are insisting on the railways obtaining No-Objection Certificates (NOC) from their community before going ahead with the railway project. They cite an earlier instance to support their case.

Construction of a flyover over Rangpo river was recently stopped by the Calcutta High Court in February 2019 for non-compliance to the Act. “We approached the Calcutta High Court and secured an order to stop the construction of a one-kilometre flyover being built over Rangpo because FRA rules had been flouted. The flyover was a threat to the environment and would have resulted in the destruction of 57 houses and a portion of a playground. Despite all this, no permission was sought from the gram sabha. This was a flagrant violation of the rules,” says Ganesh Khati, 39, who filed the petition in the High Court against the flyover construction.

Activists apprehend natural disasters

Environmentalists have voiced concerns about the impact of the rail link project on the environment. “This area is a seismic zone IV and the slopes are fragile. The natural equilibrium of the region might get destroyed and the danger of landslides and earthquakes might increase if this construction continues. We have already seen roads caving in some regions of the hills after construction started in some parts,” says Jatishwar Bharati, a geographer based in Jalpaiguri, West Bengal. According to Bharati, the deforestation could also stop the natural underground recharge of water, increasing water woes in the region. “Several streams have already run dry. We have seen how development projects have ruined Uttarakhand and taken several lives,” he adds.

A section of geologists says that road constructions have already made mountains weak giving rise to the dangers of landslides and other natural disasters. Darjeeling’s mountain rock is quite fragile and its compactness is low. Besides, the area receives very high rainfall and its soil has extremely low water retention ability. Under these circumstances, a landslide is always waiting to happen, especially since appropriate building norms are hardly followed.

But another section of geologists says that it would be too early to predict anything on the project unless it becomes operational.

“It is difficult to predict what impact the project would have on the environment unless it kick-starts. It might affect the nature or might not. We have to wait and watch. But sub-Himalayan belts of Eastern Himalayas are prone to dangers,” said Abdul Mathin, a retired geologist, Calcutta University

It is being widely believed that back-to-back dams on upper reaches of Ganga River and its tributaries like Mandakini, Bhagirathi and Alaknanda in Uttarakhand had intensified the magnitude of the disaster of 2013 floods in Uttarakhand.

Swatahsiddha Sarkar, director of the Centre for Himalayan Studies at North Bengal University, interviewed 130 villagers, living along proposed rail link route, last year. Of them, 47 percent said they would not allow the project to come up under any circumstances. “We interviewed people in five villages, many of whom feared that the project would not only trigger natural disasters but the increased connectivity might also lead to an increase in the crime rate and rise in the number of tourists would translate into rising pollution.”

It is because now the road link remains the only way to reach Sikkim. But the influx of people will increase as the rail link is established and so greater dangers of increasing crime because the movement of people will be frequent. As tourists would be more so petty crimes might rise

According to Soumitra Ghosh, spokesperson of the All India Forum of Forest Movements (AIFFM), around 24 villages will be destroyed due to the railway work. The AIFFM has been part of agitations against the project in the area and has submitted a memorandum to the district magistrate of Kalimpong to save the villages. “The government has been putting intense pressure and threatening those raising their voices against this project. The government is being very shrewd. They will displace only a few people initially, and will increase the numbers bit by bit to prevent any mass agitations,” said Ghosh.

Railways assure minimum damage to the environment

The Railways, however, have dismissed chances of natural disasters and, instead, assured that the rail route would lead to an increase in tourism and, therefore, more avenues of employment and income generation. Officials claim that issues regarding the NOC would also soon be sorted out.

“The alignment of the route has been done in such a way that there is minimal damage to the environment and biodiversity. We are already planting twice the number of trees that are to be uprooted. The major part of the route has been planned underground to ensure that no harm is done to the environment. We have a technical team that is looking at ways to minimise the impact on the environment. We hope that the issues the villagers have are sorted out soon so that work can progress faster,” says Bhutia, adding that only 30 families will be displaced by the project and they would be rehabilitated soon.

(This story was first published on Mongabay)

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Combination of four negative news has made the market weak, says SP Tulsian

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A weak GDP data, a sharp fall in the rupee and worries around PSU banks proved to be a heady cocktail for the bulls who simply ran for cover in trade on Tuesday. Sensex and the Nifty ended with cuts of over two percent. Nifty breached the 10,800 mark after five sessions and Sensex lost nearly 800 points. Midcaps and PSU banks got battered in trade as the government move to merge 10 PSU banks into 4 failed to excite investors.

SP Tulsian shared his views and outlook on fundamentals of the market as well as on some of the sectors.

“This is a combination of all four negatives. First, we had the disappointing gross domestic product (GDP) figure for the first quarter. Second,  auto sales numbers continue to be weak. Third, the goods and services tax (GST) collection having come below Rs 1 lakh crore and fourth is a lower index of industrial production (IIP). So the combination of all these four negative news flows have made the market weak,” he said.

“The main reason which seems to be plaguing the market is the financial stocks. So you had all the negative outcomes seen in these last two-three days which has been reflected into the market today,” he added.

Speaking about Mahanagar Gas Ltd (MGL), Tulsian said, “This is an opportunity to buy MGL because after the British Gas having exited, you don’t have any other fear. This disruption is just temporary and definitely the things will get resolved.”

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

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High demand for home loans, especially in affordable housing, says SBI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s largest bank State Bank of India (SBI) on Tuesday said there is high demand for home loans, especially in the affordable housing segment.

In an interview to CNBC-TV18’s Latha Venkatesh, Rajnish Kumar, chairman, said that home prices have come down and inventory is getting cleared, “For home loans, the growth is very good. SBI is still growing at 18 percent.”

On the current economic slowdown, Kumar said, “If I look at the flurry of activity which is happening, as of now, even in the government, that means that Centre is fully aware of the situation and there is a sincere effort to correct the situation wherever they can intervene.”

“Our economy, if you look at it, the demographics have not undergone a change. In many countries, demographics itself becomes an issue for reviving the economy. So, we are not in that situation. India remains an aspirational country,” he added.

Talking about demand slowdown, he said, “I am hearing from almost all sectors and in auto, it has been more pronounced. However, auto even last time when I spoke to you I had said that it requires deeper analysis, it may not be purely cyclical and there may be certain structural changes. We cannot ignore the fact that some newcomers have come and they have to stop booking as it was beyond their expectation. So the slowdown is evident in the auto sector.”

About digital, he said, “We believe that India, as far as the digital economy is concerned, it is almost at par with anyone else. Many systems have been built, for example, payment system is a very unique system.”

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Closing Bell: Sensex tanks 770 points, Nifty below 10,800; PSU Banks index declined 5%, metals down 3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian shares dropped sharply to end over 2 percent lower on Tuesday after country’s economic growth in the first quarter of the current fiscal slipped to an over six-year low of 5 percent as consumer demand weakened and government spending slowed. The previous low was recorded at 4.9 percent in April-June 2012-13.

The fall was led by banking, metal and energy stocks. Major selling in index heavyweights like Reliance Industries Ltd, HDFC, ICICI Bank and HDFC Bank further dragged the indices. Meanwhile, the weak rupee also added to the losses. The rupee weakened to 72.03 against the dollar, versus its close of 71.41 on Friday.

The Sensex ended 770 points lower at 36,563, while the broader Nifty50 index lost 225 points to end the day at 10,798. In broader markets, the Nifty Midcap and the Nifty Smallcap index declined 1.8 percent each.

Meanwhile, stocks in Asia were also bruised as the United States began imposing 15 percent tariffs on a variety of Chinese goods on Sunday as Beijing initiated new duties on US crude.

Only Tech Mahindra and HCL Tech gained on the Nifty50, while all other stocks ended in the red. Tata Steel, UltraTech Cement, ICICI Bank, Titan and IOC were the top losers on the index.

All sectoral indices ended in red for the day. The Nifty PSU Bank index lost the most, down nearly 5 percent followed by the Nifty Metal, which fell 3 percent. Meanwhile, the Nifty Bank, the Nifty Private Bank and the Nifty Fin Services indices shed over 2 percent each. The Nifty Auto and Nifty Realty also lost 1.6 percent and 2.3 percent, respectively.

The Nifty PSU Bank index fell over 4 percent after the government announced a series of mergers involving 10 such banks to boost the struggling sector and revive economic growth. Indian Bank, Canara Bank, Punjab National Bank and  Union Bank of India tumbled between 5.8-12 percent.

Auto stocks were beaten after top automakers reported a slump in August sales over the weekend. The Nifty Auto index fell as much as 1.6 percent, with Tata Motors dropping 4.7 percent and Eicher Motors declining 3 percent. Bajaj Auto, Hero MotoCorp, Maruti Suzuki and M&M also plunged during the day.

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Cancer overtakes heart disease as biggest rich-world killer

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Cancer has overtaken heart disease as the leading cause of death in wealthy countries and could become the world‘s biggest killer within just a few decades if current trends persist, researchers said on Tuesday.

Publishing the findings of two large studies in The Lancet medical journal, the scientists said they showed evidence of a new global “epidemiologic transition” between different types of chronic disease.

While cardiovascular disease remains, for now, the leading cause of mortality worldwide among middle-aged adults – accounting for 40% of all deaths – that is no longer the case in high-income countries, where cancer now kills twice as many people as heart disease, the findings showed.

“Our report found cancer to be the second most common cause of death globally in 2017, accounting for 26% of all deaths. But as (heart disease) rates continue to fall,cancer could likely become the leading cause of death worldwide, within just a few decades,” said Gilles Dagenais, a professor at Quebec’s Laval University in Canada who co-led the work.

Of an estimated 55 million deaths in the world in 2017, the researchers said, around 17·7 million were due to cardiovascular disease – a group of conditions that includes heart failure, angina, heart attack and stroke.

Around 70% of all cardiovascular cases and deaths are due to modifiable risks such as high blood pressure, high cholesterol, diet, smoking and other lifestyle factors.

In high-income countries, common treatment with cholesterol-lowering statins and blood-pressure medicines have helped bring rates of heart disease down dramatically in the past few decades.

Dagenais’ team said their findings suggest that the higher rates of heart–disease deaths in low-income countries may be mainly due to a lower quality of healthcare.

The research found first hospitalisation rates and heart disease medication use were both substantially lower in poorer and middle-income countries than in wealthy ones.

The research was part of the Prospective Urban and Rural Epidemiologic (PURE) study, published in The Lancet and presented at the ESC Congress in Paris.

Countries analysed included Argentina, Bangladesh, Brazil, Canada, Chile, China, Colombia, India, Iran, Malaysia, Pakistan, Palestine, Philippines, Poland, Saudi Arabia, South Africa, Sweden, Tanzania, Turkey, United Arab Emirates and Zimbabwe.

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Delhi Police issues 3,900 challans on first day of newly amended Motor Vehicles Act

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Delhi Police issued 3,900 challans, including 45 to drink and drive and 557 for dangerous driving, to traffic rule violators on the first day of the newly amended Motor Vehicles Act, which came into effect on Sunday, officials said.

Parliament had in July passed the Motor Vehicles (Amendment) Bill, 2019, which seeks to tighten road traffic regulations such as the issuance of driving licence and imposes stricter penalties for violations in an attempt to improve road safety.

Higher traffic penalties have came into effect across the country from September 1 under the Motor Vehicles (Amendment) Bill, 2019.

“We have issued 3,900 challans, including 45 for drink and drive, 557 for dangerous driving, 42 for over speeding, 207 for red light jump, 195 for seat belt, 28 for triple ridding and 336 for helmet,” said N S Bundela, Joint Commissioner of Police (Traffic).

The challans have been sent to e-court as the police officials do not have authority to compound them, he said.

“We do not have authority to compound the challans or close the case after taking the charges in cash. We have sent them to e-court,” Bundela said.
Police said body worn cameras have been provided to the staff to curb the corruption.

“We have 626 body worn cameras which have been provided to record the incident and curb the corruption cases,” they said.

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When ‘energy’ drinks actually contained radioactive energy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Modern life have you feeling frazzled? Flagging a bit as you rush through your day? Maybe you’re one of the millions of consumers who lean on energy drinks to put a little extra pep in your step.

Though emblematic of our time, energy drinks aren’t an invention of the new millennium. People have relied on them to combat fatigue for at least a century. Today, their “energy” typically derives from some type of neurological stimulant that makes people feel more energetic, or sometimes just sugar.

But there was a time when energy drinks actually contained real energy. The active ingredient in these drinks was radium, a radioactive element that releases a packet of radiant energy with every atomic decay. While the connection between consuming a radioactive element and reaping a perceived energy boost is tenuous at best, it didn’t stop people in the early 1900s from ignoring the known downsides of ingesting radioactivity and risking the long-term health consequences.

Yum yum radium?

One of these energy-containing products was RadiThor. This energy drink was simply radium dissolved in water. It was sold in the 1920s in one-ounce bottles costing about US$1 each ($15 in 2016 dollars). Its manufacturer claimed the drink not only provided energy but also cured a host of ailments, including impotence. Evidence for a sexual benefit to humans was lacking, but at least one scientific paper claimed that radium water could increase “the sexual passion of water newts.” For many men, in this pre-Viagra era, the water newt evidence was enough. RadiThor was a big seller.

RadiThor’s most famous customer was Eben Byers, a Pittsburgh industrialist and amateur golfer of some repute. Byers first became acquainted with RadiThor when he took it to help heal a broken arm. Although the product contained no narcotics at all, Byers became at least psychologically, if not physiologically, addicted to it. He continued to consume large amounts of RadiThor even after his arm had healed. He reportedly downed a bottle or two daily for over three years, and sang its praises to all his friends, some of whom also took up the RadiThor habit.

In the end, Byers’ RadiThor addiction killed him. Unfortunately, ingested radium gets incorporated into bone and all of its radiation energy is, therefore, deposited in bone tissue. Over time, the radium delivered a whopping radiation dose to Byers’ skeleton. He developed holes in his skull, lost most of his jaw and suffered a variety of other bone-related illnesses. Ultimately, he died a gruesome death on March 31, 1932.

Relearning radioactivity lesson

The shame of this was that the dangers of ingested radium were already known, even before Byers started taking RadiThor. As I describe in my book, “Strange Glow: The Story of Radiation,” the medical community had been studying the health effects of radium since its discovery by Marie and Pierre Curie in 1898. British scientist Walter Lazarus-Barlow had published as early as 1913 that ingested radium goes into bone. And in 1914, Ernst Zueblin, a medical professor at the University of Maryland, published a review of 700 medical reports, many of which showed that bone necrosis and ulcerations were a frequent side effect from ingesting radium. Unfortunately, the early red flags went unnoticed, and RadiThor sales remained strong through the 1920s.

When Byers died, he was put to rest in a lead-lined coffin, to block the radiation being released from the bones in his body. Thirty-three years later, in 1965, an MIT scientist, Robley Evans, exhumed Byers’ skeleton to measure the amount of radium in his bones. Radium has a half-life of 1,600 years, so Byers’ bones would have had virtually the same amount of radium in them as they did on the day he died.

Evans was an expert at measuring and mathematically modeling the human body’s uptake and excretion of radioactivity. Based on Byers’ self-reported RadiThor consumption, Evans’ model had predicted that Byers’ body would contain about 100,000 becquerel of radioactivity. (“Becquerel” is an international unit of radioactivity.) What he found was that Byers’ skeletal remains actually had a total of 225,000 becquerel, suggesting that either Evans’ model of radiation uptake was underestimating radium’s affinity for bone, or alternatively, that Byers had actually understated his personal RadiThor consumption by a factor of at least two. It was not possible to determine which alternative accounted for the discrepancy.

Once Evans had completed his radium measurements, he returned Byers’ bones to their lead coffin in Pittsburgh, where they remain to this very day, as radioactive as ever.

A contained catastrophe

Although Byers certainly suffered from the radium in RadiThor, consumption of these energy drinks never developed into a major public health crisis. This is primarily for two reasons. Firstly, unlike RadiThor, most of the other “energy” drinks on the market were total frauds and had no radium (or any other type of radioactivity) in them at all. Secondly, RadiThor and other products that actually did contain radium were very expensive because radium was a relatively rare and precious element that was costly to mine and purify. So only the wealthy, like Byers, were able to drink it on a daily basis. Consequently, RadiThor ailments were confined largely to the few who could afford to pay for it.

Ultimately, in the interest of protecting public health, the federal government closed down the Bailey Radium Laboratories — the company that made RadiThor — and radium-containing energy drinks disappeared from the consumer market by 1932.

Today, the energy drink market is occupied by drink formulations that rely on the stimulant caffeine to invigorate their customers and provide them with the enhanced “energy” that they seek. Caffeine — the commonplace ingredient in coffee, tea, chocolate and cola — may not be as exotic as radium, but it actually is a stimulant, so customers do feel energized, and it isn’t very dangerous to health.

Today’s customers seem content with these newer alternatives to radium-containing RadiThor. It’s not clear, however, whether the water newts are satisfied.

This article is republished from The Conversation under a Creative Commons license. Read the original article here: http://theconversation.com/when-energy-drinks-actually-contained-radioactive-energy-67976.

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There is a need to support realty developers to maintain supply, says HDFC Chairman Deepak Parekh

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most lenders in the country are unwilling to give fresh money to real estate developers as there is a massive amount of unsold inventory, says Housing Development Finance Corp (HDFC) Chairman Deepak Parekh.

The regulators have to look at the real estate sector in a different way as it is not a factory; the land is always there with the developer, which has a value, the veteran banker told CNVBC-TV18 in an exclusive interview.

“Commercial real estate is booming … particularly for the IT back-office sector, one never sees a slowdown,” Parekh said, adding that the increase in urbanisation, rapid migration and the rise in youth population in metros have lifted the demand for the commercial realty.

“There is a need to support realty developers as without them there would be no supply,” he pointed out.

Excerpts from the interview:

What do you think about the current economic slowdown?

In our core business of housing, affordable housing is the name of the game. We see massive growth in affordable housing. We have a large fund (HDFC Capital Affordable Real Estate-2 or H-CARE 2), National Investment and Infrastructure Fund has also put in $100 million, so it is a $1.1 billion fund. We have launched half a dozen projects in the last three months across India — Noida, Gurgaon, Pune, Mumbai and Bangalore. Reliable developers, right-sized apartments, right-priced apartments and fits in with the Prime Minister’s Awas Yojana (PMAY) scheme and they are selling like hot cakes. Trust me – on the day of the launch, 70-80 percent goes.

The prime minister has been speaking about this PMAY for a few years now. You are saying that now it is kind of an inflection point.

First of all there are two things. Recently, they have also increased the eligibility of a developer, which is tax-free income. For four metros, it has been increased to 60 square metres and in other locations, it is 90 square metres, this is carpet area. So developers on the outskirts of the four metros are building 400-500 sq. ft. homes, their total income is tax-free and that is the incentive they get and there is demand.

Some of the individuals who buy flats in this may qualify for the PMAY, some may not qualify because it depends on whether you own a house, it is a second house or new house, etc. So we see housing at the right price.

The other good news in the real estate sector is commercial real estate. Commercial real estate is booming. Particularly for the IT back-office sector, there is no slowdown. I have visited places like Hyderabad, Bangalore and Chennai recently and lakhs and lakhs of square feet are under construction.

The other good news is that builders want to build themselves, but there are buyers, there are buyers like sovereign wealth funds, there are buyers like private equity funds, there are buyers like the Blackstone, the Brookfield of the world who are buying and there are many more buyers who are coming in. They are buying it for yield.

So far, the story sold to us is that real estate is in a funk. Then what is in a funk?

Real estate is in a funk for larger homes, for homes which are unaffordable. In the centre of the city, close by suburbs, the real estate developers are in a bit of a bind; after demonetisation the spiral has come down and we have to help the developers, we have to support the developers because without the developers there is no supply.

The government and the regulatory agencies are trying to figure out the problem. There is some massive amounts of unsold inventory and no one is willing to lend fresh money to them.

My personal view is that even the way the non-performing assets is calculated, the regulators have to be a little different in looking at the real estate; it is not a factory. The land is always there with the developer, the land always has a value. If the developer is not able to build a phase because there is no demand, he cannot pay you back from the first phase, and you qualify his account as NPA. But he is sitting on land, which has value. When the demand picks up, when the economy picks up or he redoes his planning to make smaller apartments, you are going to get value. So real estate is something different. My personal view is the regulators have to look at it differently.

That is what the power guys also said, that we have to be looked at differently. I don’t think they have a choice to not implement Basel rules or 90-day rules but that apart, since we have directly jumped into the issue of real estate and housing, the expectation is that the government in this several tranche of announcements is going to perhaps announce something for real estate. According to you how can that be designed?

No, basically out of the unfinished flats, let us look at incomplete apartments, flats. I would say 50 percent of them need last-mile funding. We have to arrange that funding for these developers across the country where 80-90 percent of the building is complete. Let us finish it first. Today, the man on the street prefers to buy a finished product rather than an under-construction flat because many people have booked and are still waiting. So we have to help these people who are almost complete and not yet there.

How should the scheme be designed?

The scheme should be that you can have a stressed asset fund, which can be initiated by the National Housing Bank (NHB). All of us could put in some money, an independent group can look at it and decide which project deserves this kind of money to complete. There are various ways to handle this but this is an urgent need today, complete the unfinished houses.

Has anyone approached you, NHB or someone?

All the time we talk with NHB, our regulator.

No, the government?

Yes, we talk all the time and there is some movement, there is some recognition that we have to do something about it because there are a large number of projects, you can only do it where the developer has a reputation, where the developer is genuine. There are a large number of frauds that have taken place, developers have run away, you have seen the cases of Amrapali and Jaypee, I think the government or the Supreme Court has stepped in and asked the NBCCs to do it. So now those two projects will be taken over by NBCC.

My idea is that a similar thing we can do with private developers also or contractors. Why can’t we ask Larsen and Toubro or Shapoorji Pallonji Group or other engineering, procurement, construction contractors to do some unfinished projects?

What is your sense about non-banking financial companies and housing finance companies? There was a bit of a fear that one big one which is already being negotiated, DHFL, if that falls there will be more trust deficit and it could have a domino effect. What is the sense you are getting now? At this level of the discussions, do you think we will get by, the DHFL problem will be resolved?

Whether it is resolved or not, my firm view is that when IL&FS went down, it did not impact the financial system in India. That shows the resilience of the Indian financial system. That shows you have to give credit to the regulators, not to panic when something like this happens and the market and the lenders and the investors in the bonds and all are taking care of it by every quarter, writing off whatever is due. This is part of the game. So I think India has a strong financial base, the system is strong, one or two or three players collapsing by the wayside is not going to impact us. Our economy is not going to impact our financial system.

For the non-financial companies we have an insolvency and bankruptcy code. Despite the delays and one Essar or something at least in the case of Bhushan Steel it has delivered. We don’t have a resolution mechanism for finance companies. The Financial Resolution and Deposit Insurance (FRDI) Bill was supposed to do that but because of the bail-in of deposits it failed. Do you think it is time to reopen the FRDI for NBFCs? Do you think a mechanism is needed or do you think inter-creditor agreements are working?

No, I think some effort is needed, some collaborative effort is needed but again in real estate, like in corporate loans, there is always a consortium of lenders. So if that consortium of lenders can work closely together in a stressed project, solutions can be found. But if the consortium of lenders in a particular project fight and each one wants to get their pound of flesh or their money out first, the problem comes.

So there has to be some legal mechanism where for instance, if there is a building, a project which is incomplete and it needs 20 percent funding and these three lenders are there, they should give equal amount. Something like that must be there. It can be done while discussing with each other but it is always difficult. When a project gets into difficulty, everyone gets scared and you stop lending.

Investigation culture is there.

That is also there.

Let me come back to the slowdown theme. While it is good to hear that affordable housing is going ahead, what is your general sense about the economy? Look at our own profession, we have lost one business channel and look at the auto sales numbers. Even some of the fast moving consumer goods companies, not all of them, some of them have reported good numbers but every now and then there is a fear that biscuit packets are not selling, Britannia numbers proved that – what is your sense about this slowdown, does it go away only with interest rates because that is the big thing that is underway?

Interest rate helps but it is not the ultimate reason. Self-confidence must be there, there must be confidence in the buyers, in the people and don’t forget, I am convinced India is a consumption-oriented economy. Domestic consumption is the strongest engine that drives the Indian economy. One quarter slowdown or two quarters slowdown should not upset me at all. I think it is part of the game, we have had phenomenal sales in auto for so many years quarter after quarter and so a couple of quarters is not going to impact. Again the government has given some incentives to the auto sector, so I think that things will come back slowly.

You have seen slowdown before, you probably have a vague memory of the mid-sixties stagnation which was the long one and then you must remember the 1997 to 2002 perhaps very vividly and then of course the Lehman thing. What does it look to you? Does this look as bad as 1997? That went on, real estate prices fell rather sharply at the end of 2002 before we took off?

I personally feel that this is going to be short-lived and this is the right time because the festive season is coming, the last quarter is always – when there is good weather, there is good mood. When there is good mood, there is mood to spend and credit is available easily, penetration levels in India is very low whether you look at any item particularly here we are talking of consumption. Consumption as a percentage of gross domestic product is extremely low, it is less than half of China. So we have to grow in this. There is no question about not seeing growth. Even there is a global slowdown, it is not in India.

IMF has brought down the projections on the global growth. If you see their latest report, it is self-inflicted. It talks about the US trade war, it talks about technology disruption because of global supply chain being removed, it talks about Brexit, it talks about a number of things.

There is conversation happening that companies are leaving China. Are you noticing any FIIs coming and booking land? Is India making its way in the chain?

I think we have to improve the ease of doing business even more and this is on top of the mind of different government officials who I met. There is fair amount of interest in investment in India. I know large funds of billions of dollars who have not yet invested long-term money in India. India-specific funds have come in but global funds, sovereign wealth funds, they have just started looking at India. The amount of money we can expect from viable investments from Australia, Canada and Japan is still massive.

What is their mood? I spoke to Mark Mobius of Mobius Capital Partners a few days back and he thought that the tax on foreign portfolio investor is registered as trust created dissonance and even before that the Long Term Capital Gains Tax increase. He was a little shaken…

But he is a fund manager. You have to talk to the pension funds and the sovereign wealth funds; they are all looking at it. The sovereign wealth funds are underinvested in India, very much underinvested in India but they are looking at viable companies, good promoters and good track record.

The expectation now after the GDP numbers is that the RBI can take 5.4 to 5 in one stroke. What is your sense about the way in which policy rates can go? Do you now see them going even below 5?

My view is that rates will fall. It’s a global phenomenon and it will fall in India also and look at the broad macro parameters which are in favour of India for further reduction in interest rates. One, inflation is at all-time low and falling which is the main reason. Our reserves are $430 billion, all-time high, oil is around $60 per barrel; manageable, affordable and viable for India. Food grain production is at an all-time high, warehouses are reasonably full with food grain. What more do we need. So the macro parameters are good, there is a slowdown but the broad macro parameters, commercial real estate is doing well, which makes me believe that jobs are being created because I visit and there are thousands and thousands of people working in the back office and the jobs are increasing in that. It may not be at a speed which we want but jobs are being created in the IT and IT-enabled sector. So I personally feel that interest rates globally are coming down.

Risk aversion is our only problem?

It’s not our problem. It’s a huge problem elsewhere. I have got an ad from a Danish mortgage company which says buy a house now and we will pay you.

You do think that even going below 5 percent is possible. Is there that much space?

I think there is space but if we think that this is the only reason, by going below 5 percent you are going to suddenly see a burst of consumer buying, I think that is a mistaken notion.

The government has been announcing some instalment steps; now this PSU merger, stock markets have not celebrated it.

It is just first day, give it some time, it makes huge amount of sense, it makes immense sense and the finance minister has assured that no job losses will be there. A stronger bank is much better than three banks where two are weak and one is strong.

There is no governance change, isn’t it? They cannot go out and recruit one risk officer, why cannot they go and recruit their CEOs and CFOs?

The attrition rate in public sector banks because everyone reaches that age and you have to retire, 10-15 percent of people retire every year, so that way you can bring more talent. Integration takes time, integration is painful but medium-term you will get good results. You don’t look at the stock market in one day. According to me, it makes utmost sense.

It makes sense but is it that big a reform, does it change the DNA of banks?

That we have to change, now we have to give more authority, more autonomy to the people and I think the FM did make a point that judgemental errors will be overlooked, she did make a strong point that judgemental errors will not go against the individuals, so they are trying their best.

People like PJ Nayak of the PJ Nayak Committee and YV Reddy when he was the governor, have argued that the time has come to sunset the Bank Nationalisation Act, the Banking Companies Act and move them to Companies Act?

The bigger issue here is should the government go down below 51 percent stake and here again my hunch is that government will again look at it selectively, go down to 26 percent because these banks need more capital and if we are a capital short country, we need to put money in infrastructure, in urban infrastructure. The urban infrastructure spend is a percent of GDP in India. It’s very low, we have to increase that.

 When the move started for finding a successor to Aditya Puri, you are the big shareholder?

The board is looking at it, the Nomination and Remuneration Committee (NRC) is looking at it and at the right time we will form a committee. We have the NRC which will look at it and we are going to have a look at some of the head hunting agencies, the NRC will look at it, appoint one some time.

The process has not started?

The process is discussed, not yet started. I don’t think it will take that long. I think you guys are worried about Aditya’s successor than we are or the market is.

Of course they would, investor would be?

Investors are talking about it but it is still over a year more.

There are a lot of insurance companies still available, is HDFC Life a buyer?

We are always a buyer at the right price.

Should we see something, the performance of HDFC Life was very good, so now the currency of your share is very positive?

I am very bullish on both asset management company and life insurance company and these are long-term value creators. We have already created value, both the shares have doubled after the IPO and both are doing well. We are always on the lookout for good quality assets or insurance companies. You may hear something even.

You make us feel very positive, but when I go out – abhi Zee ka payment nahi aya aur 11 percent share abhi bika nahi hain?

Bik Jayega, hume patta hain bik jayega.

DHFL as well you think buyers are there?

The promoters have said if the banks take some haircut then it can be revived, so some decision of debt into equity, something like that will have to be done.

Are you somewhat certain that in the New Year on January 1, we will be less morose about growth?

I would think so, I would hope so.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow