Deepak Parekh sharply revises up rating of Modi government

Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC), India’s largest mortgage lender, have drastically changed his view on the Narendra Modi government in the last one and a half years. 

On Monday, the financial industry veteran said “India has never been in a stronger position than today from a macro-economic perspective.”

This is because demonstrating immense growth potential, and there is a “strong leadership at the helm driving key policy changes,” which has weeded out large scale corruption at the centre.

India has also benefitted tremendously from lower crude oil prices, and considerably good monsoons that have been better than the previous two years.  

“There is a flurry of activity taking place – across ports and water ways, airports for better regional connectivity and the initiation of smart cities through area based development. Increased installed capacities in renewable energy have been put in place and a number of initiatives in the railways to improve services are underway.  The biggest mark of credibility that India has is that today, all government tenders and bidding are being done transparently through e-auctions,” Parekh said in his keynote address at the second CII National Risk Summit. 

This is in stark contrast of what Parekh said in February 2015 in an interview with new agency PTI. 

“… after nine months, there is a little bit of impatience creeping in as to why no changes are happening and why this is taking so long having effect on the ground.

“The optimism is there but it is not translating into revenues. Any industry you see, when there is a lot of optimism, the growth should be faster,” Parekh said in the interview, adding, “Things are happening at such a speed around the world, we need to move faster as well.”

In another interview with Business Standard in October 2014, a few months after Narendra Modi was elected as the Prime Minister of India with a huge mandate, Parekh has said after investors were showing exuberance on the Modi government, but the centre should start taking decisions. 

“Uncertainty hurts and, therefore, should go. It is time the government started taking decisions,” Parekh told Business Standard in October 2014 prodding the government to take effective decisions on coal mines and gas pricing. 

“Let us focus on decisions. For example, the Budget says we will get Rs 58,000 crore from disinvestments. But we have hardly got any so far. If you wait for the last day, it is not going to work. You cannot bunch Rs 50,000 crore in two months. You do not need any reforms for these things; it all boils down to decisions,” he said in the interview. 

Surely, his speech on the CII summit on Monday shows that Parekh has updated his assessment on the government and has given thumbs up. 

“Often when infrastructure projects are a work-in-progress, there tends to be a feeling that nothing is happening on the ground. But this is certainly not the case in India,” Parekh said in his speech, adding, “India has never seen better days than the present, so I am confident that businesses across the board will see an upswing.”