Budget 2013-14: Chidambaram's investment push to yield result: Tata Steel

In the Budget 2013, finance minister focused on encouraging the investments through investment allowance and pushing the issue of Delhi-Mumbai corridor. Koushik Chatterjee, group CFO, Tata Steel told CNBC-TV18 that he does not see an immediate result because investment decisions are taken over a period of 6-7 months after which the approvals take place. "There are no shortcuts to situation that we have in the first 2-3 quarters. Maybe in a year, investmnets will gradually build up tempo.

Also Read: Budget 2013-14: FM cuts STT, introduces CTT on non-agri commodities Below is the verbatim transcript of Koushik Chatterjee's interview on CNBC-TV18 Q: The PPP for coal mining seems like an innovative route because the Coal Nationalisation Act cannot be amended anytime soon and the allocation of coal blocks has run into a huge mess. Do you think PPP will fructify or do you think the bandwidth of Coal India will anyway be a restriction because the PPP partner has to be Coal India?
A: Yes, while I don't know the details as yet, it is only a statement that we have heard. The focus will be on how efficiently coal should be mined with the reserves that Coal India has. It could be in the form of a contract mining with off-take, royalty payments to Coal India. There are various models that can be followed and can certainly enhance the coal production in the country.
There are many reserves, which are not actively mined by Coal India or its subsidiaries. So, there is a vast potential which can be leveraged if the framework of he PPP model is structured effectively. Q: Later this evening we will get a gross domestic product (GDP) figure. It will be the first time in many years that we see a sub-5 percent print. Do you think that will aid the growth prospects over the next couple of quarters because we also had a miserable earnings season in Q3? As you represent corporate India, do you think there was a big enough push for growth?
A: There is no doubt of the fact that the Finance Minister (FM) realises that we are in some form of an economic crisis, which has been coming at us for the last one and half years.
Within the constraint that he has, he is trying to focus on the investment area through investment allowance and announcement of some of these investments like pushing the Delhi-Mumbai corridor and so on. He also spoke about heavy investments imports which is a good thing about raising the investment tempo.
Some of it in investments is also about perception as to how companies see the future. FM is also trying to address some of the multipliers like the urban and rural housing fund, which will have the construction segment and hence its effect on cement, steel and so on.
The finance minister also has his hands tied up. Balancing between social sector spending, investment focus and savings by the people, who would hopefully spend more, has done a balancing trick between all these priorities.
He has got a tough job to balance his books. I don't see an immediate trend in the next one or two quarters because investment decisions are taken over a period of 6-7 months after which the approvals take place.
We all are talking about atleast 2-3 quarters for people who have a right intent to get to their drawing boards and start looking at how they can make viable investments. So, there are no shortcuts to situation that we have in the first 2-3 quarters. Maybe over a year, it will gradually build up tempo.