BJP talked about clarity, investments, rolling out the red carpet, no red tape, but all hasn't happened yet, says Kanwal Rekhi, MD, Inventus Capital Partners. However, he likes the tone of the government
Despite the clarity on MAT now, the question remains why did it become an issue in the first place, asks Kanwal Rekhi, MD, Inventus Capital Partners. "There is lack of clarity and purposefulness in their head. MAT was not an issue last year or the year before that," he told CNBC-TV18.
BJP talked about clarity, investments, rolling out the red carpet, no red tape, but all hasn't happened yet, an upset Rekhi says. Though, he likes the tone of the government, he would like to see it materialise.
He advises the government to make bankruptcy laws simpler, make winding down easier, make exit laws simpler, among others. He says while he is betting on India, it in unnecessarily painful to invest there. According to him, at the moment, all factors, right from demographics to everything else is favouring India. However, he adds that India has a history of disappointing frequently.
Despite all this, Rekhi believes India will succeed no matter what. He says he is bearish on the government, but is bullish on Indian entrepreneurs.
Below is the verbatim transcript of Kanwal Rekhi's interview with CNBC-TV18's Kritika Saxena
Q: The big news back home in India today is the fact that there has been some clarity as far as MAT is concerned. So, foreign investors that do not have a base in India will not be imposed MAT at least retrospectively. Will that change the way you look at your investments in India, would that give you some more hope?
A: Yes, but the issue here is why did that happen in the first place? MAT wasn’t there until these guys did it. Why is MAT an issue? There is a lack of clarity in their head, there is lack of purposefulness in their head. It wasn’t an issue last year and year before. So, I think these guys need to decide what they want to do. They cannot be shooting themselves in the foot and then say I made a mistake.
Q: The fact is that we were very uncertain about MAT but now there is some clarity as far as foreign investors are concerned.
A: Yes but what next? That is the problem. Why can't they be more clear and purposeful about making the issues clear?
Q: This doesn't give you more confidence as a foreign investor?
A: It is resolved positively but why did they shoot themselves in the foot in the first place.
Q: Irrespective of the Prime Minister's effort to woo foreign investors, his efforts to simplify tax norms, simplify regulations, simplify FDI to an extent, are you saying that is not enough yet?
A: It is mostly talk. I like the tone. I like the messaging but I would like to see the substance also. The substance is still missing. Why do I have to go through Mauritius to come to India, why can't I come to India directly, why do you force me to go to Mauritius. If you are trying to give me tax breaks in India for investment why are you forcing me to Mauritius, why not do it directly.
Q: What are the sectors that you are bullish on, you have been bullish on ecommerce. In fact if you take redbus for example the kind of exit returns have been phenomenal.
A: I was also investor in Indiabulls at one time. We are bullish on internet based companies.
Q: So, largely the technology, disruptive cloud technology space. You wouldn't look at consumer, you wouldn't look at healthcare?
A: We are into consumers. we are into PolicyBazaar which are consumer companies. We are into consumer for sure. I like the market places, I don't like e-commerce companies, I dont like inventory carrying e-commerce companies like — I dont want to mention names. But the companies which are using technology to make the market places happen. We are into large companies which are doing very well in India. By the way I wanted to tell you Indian entrepreneurs are as good as entrepreneurs anywhere in the world.
Q: So, as far as the government is concerned you are bearish, but you are bullish on Indian entrepreneurs?