Upbeat on success of UDAY, CIL divestment: Piyush Goyal

The government seems to be on track to achieve the fiscal deficit target of 3.9 percent of GDP, says power and coal minister Piyush Goyal. In an exclusive interview to CNBC-TV18's Shereen Bhan, he touched upon various issues such as the UDAY scheme, Delhi pollution issue, fiscal deficit target, Coal India divestment, winter session, climate change, Money Bill, raid conducted on Delhi CM Arvind Kejriwal's office and most importantly government's targets for 2016.With regard to the UDAY scheme, he is confident of it being a success. Already 11 big states are onboard and he expects most of the states to come on board by end of the financial year. According to him, there is very little scope for disagreement between states and the Centre. "So far, all dialogues with states have been very positive," says Goyal.Bankers too are completely on board and all their concerns have been addressed, says Goyal.As far as Coal India divestment is concerned, Goyal is confident that it will happen at the right time. He said CIL is an outstanding company with tremendous future and so there is no reason to shelve the divestment plan. "We have taken a decision in the cabinet and at the appropriate time and in the right manner the Finance Minister is duly authorised to decide both the timing and the manner in which we will disinvest," he adds.Talking about India's commitment at COP21, he says India is focused on energy consumption and energy conservation. "India committed to much larger use of renewable energy at COP21," he adds.Below is the transcript of Piyush Goyal’s interview with CNBC-TV18's Shereen Bhan.Q: I can't help but ask you, should we write off the winter session of parliament. The Finance Minister yesterday in his blog said that the winter session looks like it is going to be a washout like the previous session of parliament. In the light of what has happened today with the raids on the Delhi Chief Minister's office by the Central Bureau of Investigation (CBI) and then the TMC and the JDU support to Arvind Kejriwal and the Aam Aadmi Party (AAP), is it now fair to assume that this session of parliament is over?A: I don't know about the entire session of parliament. That is really something for the principal opposition party to talk about. More so because we are very keen that the parliament works and we pass some very important legislations. But I would just like to correct your perception. There has not been any raid on the honourable Chief Minister of Delhi. The Finance Minister made it very clearly. There is an officer who happens to work in that department, there is some cases which have been going on, been under investigation for a long time for some of his decisions made in a prior assignment, nothing related to his current assignment. His office, I am given to understand, is far away from the Chief Minister's office room. That is where the officials were.Q: Mr Kejriwal just held a press conference a couple of minutes before we started this interview attacking the Finance Minister and his statement that he made in the parliament saying that why was there a need then if it was on that officer to come to the Chief Minister's office so on and so forth.A: The Principal Secretary to the Chief Minister's office has to be in the building where the Chief Minister's office is and if they have to investigate - let me ask you an elementary question. We have always held the view and this government has consistently acted on our own conviction that the government should not interfere in any investigation and we should allow investigations to run their course honestly, fairly without prejudice to any political interest one way or the other. Now if at all we were to be inspiring any such raid it is elementary knowledge that we would do it after 23. So, it is very silly of anybody to suggest that it is the government that is trying to put anybody into the dock or anything. Government has nothing to do with this entire process. It is an investigation that is going on. We came to know about it after the thing broke out on television.Q: There were reports coming in yesterday that seem to suggest and this is something that the Finance Minister has alluded to in the past as well that the government may consider the Money Bill route in order to get over the impact in the Rajya Sabha. Is that now a serious possibility for things like Aadhaar Bill, Bankruptcy Code?A: All options are open wherever we think it is in national interest and the natter can be taken up by the Lok Sabha which fortunately is functioning, I am sure the government of the day has every right to in the interest of the people, in the interest of economic progress act. Q: There is very little time left for this session. So, a decision must have been taken by now. You had a parliamentary party meeting today.A: I am not privy to these decisions. They are taken at a much higher level. I can only talk about decisions related to my ministry.Q: Would it be safe to assume that this is the route now that the government is going to exercise in this session of parliament to at least ensure the passage of some crucial bills. You can't do GST but at least some of the other bills?A: I don't know whether within this session there would be any such plans but that is something which only the Finance Minister would be privy to. I am not privy to any such information.Q: The big achievement of your ministry is to really get the UDAY plan off board. At last count if I have been following your tweets accurately, you have got 11 states onboard. When are we likely to see the big guys coming onto the UDAY plan, the likes of UP, Bihar and others?A: Good part of the entire UDAY scheme is that it has been a bottoms-up approach. So, the entire scheme has been drawn up in consultation with the states. It is a true example of what Prime Minister Modi has articulated right from the beginning that this government will work in a collaborative spirit and take all the states onboard and work as Team India. UDAY has come out of all consultations with stakeholders like states, distribution companies, bankers, consumer interest and therefore there is very little scope for a disagreement between states and the Centre. I think the political reality has been well understood by everybody across the country, that the people are aspiring for better quality of life and power is an essential ingredient in that. I am very convinced that all the states will come onboard. 11 of the states which have come in are amongst the larger states. 5 or 6 states which are left are already in dialogue at very advanced stages with us, though most of the issues with them were resolved much before UDAY was even formulated. They still have to go through a process of going to their cabinet, taking approvals of the senior leaders.Q: If I could read between the lines here, is UP waiting now for cabinet approval before it can formally come onboard, is Bihar waiting for cabinet approval before it can formally come onboard, is Tamil Nadu waiting for cabinet approval before it will formally come onboard?A: I can only say this that we are in continuous dialogue with most of the states that you mentioned. So, far all the dialogue has been very positive, response has been very positive. We have kept an approach of accommodating any concerns that the states have had and I wouldn’t be surprised if you keep hearing good news at very quick intervals in the days to come.Q: So, do you believe you will be able to sign everybody on board by the end of this calendar year?A: I wouldn't say end of this calendar year but I do think that by the end of the financial year end almost all the states will be on board. There may be one or two states who may have some political compulsions like elections which may make them take the decision a little later. Suppose the election court comes in or a model court comes in and they are not able to decide by that time I have yet to personally talk to the north eastern states, the seven sisters and Sikkim. The eight states, the union territories, my teams are talking to them but I will get down to making a few calls and hopefully get them on board too very quickly.Q: Because you talked about some of the concerns that state governments had raised. As part of the UDAY plan, there were nine important conditions that the government at the centre had put on board for the states to come on board. Have all of those nine conditions been agreed to by the states?A: It was an optional scheme. There was nothing mandatory in this.Q: But there were conditions that you put on the table for them to be able to join the scheme?A: No, but there were conditions that were put on the table on myself, on the central government also, on the government utilities also, on the coal companies also. So, this has been a scheme where the commitments are more in the nature of self imposed conditionalities which we have imposed on ourselves, which states have agreed to impose on themselves.So, this is a joint and collaborative effort and obviously when somebody is signing up or committing to come onboard on UDAY and writing in to the ministry that we are in principle on and let us start preparing the Memorandum of Understanding (MoU) or the agreement or the framework within which we will all work it obviously means that they like this scheme in its entirety.Having said that even if as we go along some state has some particular concern which goes beyond Uday. After all any scheme cannot be a ‘one size fits all’ and I have always held that view. I believe that in all fairness we have to be practical, we have to be open minded and work in a constructive spirit of cooperation and that is how I don't see any problem on getting this implemented. Q: Do you envisage any problem on the end of the bankers. I know that you have held a meeting with the bankers and they seem to be onboard and excited about the UDAY plan as well. Any specific concerns that continue to be unaddressed at this point in time specially when it comes to the bond takeoff? A: I can only tell you that most states often criticise UDAY for only one thing, that it seems to be favourable for the bankers more than for the states themselves. The fact is that it is a fair scheme which is in the interest of bankers, states and more importantly in the interest of the people of India, the consumers who ultimately deserve to get affordable energy access. This scheme before it was announced was discussed threadbare with bankers throughout the country, all the bankers who have a stake in the power sector. We also discussed with those bankers who may not have had a stake in discoms but have lent to power companies which are today stranded, stressed without PPA, without business to possibly become NPAs in the days to come. So, UDAY gives the ray of hope that all that also will get resolved in the days to come. Therefore the entire scheme was discussed with bankers ad nauseam. Before it was announced I actually took a commitment from each one to make sure that nobody has anything which still leaves a scope for stress. However there were some concerns that I heard in my own home city of Mumbai and after that I once again called the bankers in the same room. We had extensive discussions on December 9 with all the bankers and I once again raised the question if they have any concerns. In fact the bankers profusely thanked the central government, Prime Minister Modi for the great effort that the central government has done to help the banks, help the states and help the people of India. So, bankers are completely onboard, they had one or two concerns which also were addressed across the table on December 9. Q: The target that you had set was that you would be able to or discoms would be able to bring down their losses over the next three years. You believe that, that is achievable, that is a realistic target? A: Absolutely. We don't do anything in this government which we don't ourselves believe in. The mood of the nation today is to resolve this problem and that is what strengthens my resolve that in the next three years we should be able to bring the national average down to 15 percent. My personal hope would be that I can get all the discoms down to 15 percent but I do visualise there will be some discoms which have over the years traditionally been so bad that I may have to give them a year or two more to come down to 15 percent. At the same time we have several states like Gujarat, Andhra Pradesh which may actually go down much lower than 15 percent. So, if the national average comes down to 15 percent I think as a nation it will be a great achievement, it will again result in savings to consumers worth thousands of crore in terms of their electricity tariffs. _PAGEBREAK_ Q: Let us move away from power and let me talk to you about coal. We have just seen that climate agreement being reached in Paris at the end of what has been an excruciatingly long wait for one. What does it mean now as far as India's aspirations are concerned, specifically in the context of coal production. We aspire to do 1.5 billion tonnes by 2020 while we haven't committed to an absolute reduction we have committed to at least bringing down green intensity by about 30-35 percent. What will that mean then for us and coal consumption as we all coal production? A: What it means is that India is committed to a much larger roll out of renewable energy. Simultaneously as the economy and the demand for power increases what it also means is that India is looking at energy conservation and energy efficiency in a big measure. In fact only yesterday we have celebrated the world energy conservation day and I interacted with school children from across the country from as far away as the Andaman and Nicobar Islands and Arunachal Pradesh and Thiruvananthapuram and I could sense that the children of today are so passionate about climate, about the planet that they will become my ambassadors towards a better future. But as far as coal is concerned the world has now accepted India's position that for our base load and to get affordable energy access to the people of India coal will be the mainstay of our energy needs. We do need to reach energy to the poor, give them 24/7 access and the time has not yet come where they can afford to pay very large prices for that. So, we will have to delicately balance our demand for power, our growth in renewables, efficiency which we can bring in and increasing coal production and increasing thermal power. Q: So, no rescaling as far as our coal production targets are concerned in light of what has been agreed upon in Paris and coal is not going to be dead for decades in India at least? A: Not at all and it cannot be and the world recognises that. After all as I have said on more occasions than one India's coal consumption today is at the same level as the United States was 150 years ago and India is at the cusp of its development cycle where I aspire to give the people of India a per capita income of the same USD 70,000 that an American has. Why should India be left at USD 1,800 per capita income when the West has moved to USD 50,000 - 70,000. So, as we move up the development cycle, as we get into double digit economic development growth of the economy as we have a better life for the people of India, better infrastructure created, jobs being provided obviously the economy is going to grow. What we have committed is a reduction in the carbon intensity based on the Gross Domestic Product (GDP). For the western world it is very easy to talk of an absolute reduction because their economies are flat, they are not growing. So, on a flat economy if you add renewable energy you can afford to bring down coal. For a growing economy and an economy growing as rapidly as India you can't say that we won't do coal and only renewable energy. So, there is no base to it otherwise. Q: If I could ask you as far as the Coal India disinvestment process is concerned. Is it off the table now for this particular financial year because there have been concerns that have been raised by the shareholders of Coal India as well on a possible divesture? A: No, first of all if a few people make some comments and as I also read in the newspaper nobody has come and met me but some comments were reported in the newspapers that some foreign investors have opposed it I don't think Government of India works on the basis of what the foreign investors say and neither do we ask to hold their shares or to disinvest their share. If they disinvest and they disinvest at low prices it is their look out and probably they will live to regret that. To my mind Coal India is an outstanding company, it has a tremendous future ahead of it, its production is galloping -- 32 million tonnes last year. This year we possibly will end up with a double digit growth, which means adding nearly 50 million tonnes of coal and with this kind of extraordinary performance that Coal India is doing, I see no reason for any shareholder to be worried and I see no reason for the Government of India to shelve their disinvestment plan. Q: So, the disinvestment of Coal India stands for this financial year? A: Absolutely. We have taken a decision in the cabinet and at the appropriate time and in the right manner the Finance Minister is duly authorised to decide both the timing and the manner in which we will disinvest. Q: Let me ask you about what is going on in Delhi at this point in time. You have got the National Green Tribunal (NGT), you have got the Delhi Government, you have got the Supreme Court all looking at Delhi's pollution woes. As part of the measures that have been announced the Delhi government has issues notices to the thermal power plant. One is already shut; Rajghat and has been shut since May of this year. What about the other two and what is the role that you will play at all and do you have a voice at all in this process? A: Frankly the central government has no say in this. It is a power purchase agreement (PPA) entered into by the state government with the power utility which is NTPC in this case. They have a PPA according to which three units have already outlived their life. 95 megawatt each and they are shut down even at Badarpur. There are two units of 210 megawatts which are producing probably at less than 50 percent capacity. Now those are units which were refurbished on the request of the Government of Delhi by NTPC and therefore there is a certain fixed cost associated with that plant. Now we have no problem, neither NTPC would have a problem should the court, should NGT like to shut it down. By the way the so called pollution out of those plants is miniscule when you look at it in the overall context and the NGT and the Supreme Court are already ceased of the problem and we respect what they are doing and we certainly all of us, we are all living in Delhi and we would like to have a cleaner city to live in. So, I am sure NGT and the Supreme Court will come up with a robust mechanism and framework in which these things can be resolved. As far as shutting down these plants are concerned there is a PPA which has to be respected. So, there may be certain payments which may be required to be made by the Delhi discoms. Since these plants have been set up and been refurbished based on that PPA. It is a legally binding document which all of us have to respect. Q: Since we are talking about payments that need to be made, in light of the fact that the disinvestment target is going to be significantly short of what the Budget estimate was and today in the parliament while speaking the Finance Minister has said that he hopes to achieve the 3.9 percent fiscal deficit target and says that possibly the government will achieve the 3.9 percent fiscal deficit target, the tone and tenor of the Finance Minister is different from the confidence that he exuded as far as the fiscal deficit roadmap was concerned in the past. Are we to assume that we are going to see some hefty dividend payouts from the companies that come under you ministry for instance? A: I don't know how you felt about that tone but my own reading and my own discussion seems to reflect the Finance Minister is completely on track. I have no doubt that we will achieve our fiscal deficit target. He has managed the economy very prudently, he has kept his expenditure under control. Prime Minister himself has been monitoring expenditures very tightly. This is a government which has completely eliminated corruption. We have traditionally always talked about how governments could perform much better without corruption. So, we are very confident that we will do well. As far as dividends are concerned, all these companies have been setup with government capital. At some point of time government invested large amounts of money and at that point of time this money was very significant part of the governments Budgets. So, if the government has invested and today if the government requires any payouts, I see nothing wrong in that. I think it is incumbent on these PSUs to support the government of the day having received all the benefits from the government for years and years to come. Q: Let me ask you about strategic sales and the Minister of State for Finance in his interview with me a few days ago said that the strategic sale process had atrophied under the previous regime and now the momentum has picked up and we could perhaps see some strategic sales happen in this financial year itself, that is the hope at this point in time. Anything from your portfolio that is likely to be under that route? A: I don't think we have any such unit. Most of my companies under my ministries are already listed and those would then get into the disinvestment mode. Strategic sales would probably come in where there are private companies or companies which are totally government held. So, I don't see any company that is a possible strategic sale target within this ministry and no discussions have been held so far also. I would like to caveat the strategic sale situation with the requirement for a small amendment in the Prevention of Corruption Act. If you recall Prime Minister Atal Bihari Vajpayee's government NDA-I had taken some very bold decisions, they had disinvested hotels, they had privatised BALCO, Hindustan Zinc, IPCL, all these companies have performed exceedingly well since then and have added tremendous value for shareholders including the government of India which still continues to have equity in that. Now those decisions under the UPA for sought to be challenged in the previous decade. Some very eminent bureaucrat of high esteem were sought o be put under the scanner and were harassed quite a bit and that has led to a situation where I would think bureaucrats and for that matter anybody who has to take this decision would think twice before taking such a bold decision. Therefore we recognise that there has to be a difference between bonafide decisions and malafide decisions taken by government and public servants. We have brought in certain amendments to the prevention of corruption act where we are saying that unless a malafide is proven government servants should not be taken to task for honest decisions. We do hope that principle opposition party would allow parliament to function and get that approved so that we can take much bolder decisions in the interest of the people of India. Whether this parliament is allowed to function or no by the principle opposition party which I think has taken it upon itself not to allow parliament to function and they are still hoping that Prime Minister Modi fails in his efforts to reach the benefits of good governance to the people of India. They are also hoping that with this obstructionist attitude they will be able to get the sympathy of the people of India. I can assure you that on all three counts they are going to fail. Irrespective of whether parliament works or no the people of India have trust in Prime Minister Modi and you ultimately have expectations only from somebody whom you trust can deliver on your expectations. I assure you, this government stands committed to delivering on our promises. If we find parliament is not going to be allowed to function by the Congress, we will work within the existing framework and still deliver outstanding results for the people. Q: Since we are talking about executive action specifically for your ministries what else can we now expect. I know that there is a big thrust on trying to push renewable, we haven't seen any forward movement on UMPP, even though we saw the standard bid document being released. Is there any further movement on the UMPP process? A: Absolutely. My approach is that UMPP should be bid out as and when I can see visibility that land is very much in place, water is in place that coal mine is of course under me and we made arrangements to get coal available for these plants. I don't want to see another situation where we bid out UMPPs and then they get down into a situation where they can't be implemented in time. We are now coming to a stage where - I am in dialogue with the Bihar government, they had earlier identified land but it is important that they actually acquire the land and give it to us so I can bid out the UMPP there. The Jharkhand Chief Minister has already initiated the process to get land. Once that land comes in I am sure we can bid that out also. Tamil Nadu is keen that we bid out the Cheyyur UMPP, that was based on imported coal. I was a little hesitant on the bidding of UMPP only on imported coal but it is the state's right and they are insisting on it and we would be happy to bid it out if they want it. Orissa UMPP is also ripe for bidding out. So, I have a number of UMPPs on which different actions are taking place. I am not in a hurry because I can see that we have enough and more capacity available I have done my modelling for the next 10-15 years and I am very much on track to be able to ensure that the country never faces a power shortage in the years ahead and the UMPPs bidding will also take place at the correct and appropriate time to align with the demand of power. Q: Since we are talking about power demand what about PPAs at this point in time. We haven't really seen a pick up as far as the pace of PPAs are concerned, power demand doesn't seem to be taking off as well. What do you believe is the problem there and what do you envisage over the next few months? A: One of the principle problem there was that the discoms were in very bad shape. There was also a problem related to the cancellation of the coal blocks. So, even if there were PPAs done people didn't have coal to be able to fulfil those PPAs. This government has made an effort to resolve both these issues. With the UDAY scheme and if you have been able to go through some of the salient features and we have a 72 slide presentation in public domain highlighting all the features you will observe that not only are we resolving the discoms' past problem but we are hand holding them and working and supporting them over the next three years to really create a robust infrastructure in every state. Thirdly we are also promising to give coal blocks or coal linkages to the state discoms which perform well. Q: I wanted to get a clarification from you whether this is going to be in that sense part of the overarching UDAY scheme as well? A: Absolutely. So, all those states which sign up for UDAY and who perform well will obviously need more power and we will be supporting them with giving them coal linkages or coal blocks for which a separate policy we are taking to cabinet soon and the big advantage is that in the earlier thinking and dispensation companies would line up outside the coal ministry and then there were all sorts of extraneous considerations on who got a linkage, who didn't get one, who got a coal block, who didn't get one and now even the CBI is investigating the coal blocks and the way it was given out. I don't know how the linkages were given out in the past. What we have decided is that we will give the linkages to the state discom which lives up to the expectations of UDAY and does good work within their operation and based on that once they get the coal linkage they will be able to bid out and get the best prices. Earlier the company had coal block linkage or coal block and therefore at the power to dictate terms. Now the discom will have the linkage or the coal block and will have the power to dictate terms. So, we are totally turning around this cycle in favour of discoms which will ultimately benefit the people of India. Q: I understand that the Prime Minister has called on the council of his ministers for a meeting on December 17. What is this going to achieve, what is this about? A: Every year Prime Minister calls the council of ministers for a get together. It is an informal get together, we all exchange notes, exchange views, also lot of pleasantries since the year is going to draw to an end. Q: Is this a precursor to a possible reshuffle which has been the chatter and the buzz in the corridors of power for the last several months? A: I think we can leave that to be the prerogative of the Prime Minister. We have had similar council of ministers get together with the Prime Minister frequently in the past. He likes to meet all the ministers, even ministers of state, exchange views, ideas, get some feedback on what is happening on their work. He often gives us some very interesting insights in his way of working or what he believes we should do. I can assure you that a lot of educative guidance we get from the Prime Minister in these interactions along with some very sumptuous delicacies. Q: We are that the end of 2015, you have covered significant ground in your tenure here in the year that has gone by, what would be the key priorities for you in 2016? A: I am focused on three things in 2016. One is the successful initiation of various steps that we have envisaged under UDAY. So, I would see the first quarter going largely in finalising the 24x7 power for all programmes of the states coupled with the MoUs with the states on UDAY. Then the rollout of the Deendayal Upadhyay Gram Jyoti Yojna, IPDS and all these schemes which will help us achieve our objective of 24x7 affordable power for all. Second objective would be to meet the commitments that we have made to ourselves and the Intended Nationally Determined Contributions (INDCs) that we have offered to the world at Paris. So, we will be taking significant steps towards that in the next year - towards our renewable energy plants, clean coal plans, introducing modern technology in our sectors for better efficiency, conserving energy, better environment protection, that would be the second priority. Third priority that I am now initiating, after the successful reverse auctions on coal blocks first, then on the bidding for solar power and I am glad to inform, last night at 4 in morning I got messages on my phone informing me that another round of solar bidding has taken place. If I got it at 4 so I suspect it may have ended at about 4 am. So, there must have been really aggressive bidding and SBG the company promoted by SoftBank has won the tender at again Rs 4.63. So, you recall how all the naysayers including a lot of journalists had been repeatedly asking me this is unrealistic, unreliable, will it fail and what not. If Masayoshi Son who is a world renowned venture capitalist and a very successful one at that has bid at Rs 4.63 I hope it will set at rest all those controversies. I have also said that it depends state to state, tender to tender but it will all be an honest process. I want to take that to the next level in terms of introducing more and more reverse bidding and high levels of transparency in the entire working of our ministries, be it in purchase, be it in the information we give out about our work. So, you will have a lot of app launches in the year to come.