Davos 2017: Trump Will Reduce Regulatory Overreach, Says HCC’s Gulabchand
Entrepreneurial appetite for the PPP model is also very small, Gulabchand said.
Global leaders may be worried about Donald Trump’s Presidency, but one person who is enthused about the new White House resident is Hindustan Construction Company Ltd.’s (HCC) Chairman and Managing Director Ajit Gulabchand.
He had been rooting for Trump to win the U.S. Presidential elections, and told BloombergQuint’s Menaka Doshi on the sidelines of the 47th World Economic Forum at Davos, that Trump can help resolve issues of regulatory overreach. Since the U.S. is a major influence on other economies, winds of change in the world’s largest economy in favour of lower taxes and reduced regulatory power could also percolate to other countries, he said.
Important thing is for the long time since the financial crisis, there’s an anti-business wave throughout the world. An excessive regulatory overreach has come everywhere. I think that has caused considerable disruptions. What America does, other countries imitate and follow. So changing the American winds in favour of lower taxes, reducing the power of regulator, I think it is going to have a salutary effect on the regulator as well as its enthusiasm otherwise increasingly everything was becoming a joyless ride.Ajit Gulabchand, CMD, HCC
Gulabchand believes that India’s infrastructure sector needs better stimulus for the public-private partnership (PPP) model to work.
The basic problems are being solved on one side like infrastructure spending has gone up, a better stimulus for public private partnership is required for which we need changes in understanding allocation of risk, understanding that promises have to be kept and contracts have to be honoured. There’s a lot of learning there.Ajit Gulabchand, CMD, HCC
The present PPP model is sluggish because the banking system is a “little stuck” and is not being able to fund new projects, according to Gulabchand.
Entrepreneurial appetite for the PPP model is still very small, Gulabchand said, adding that procuring long-term funding is difficult as fund houses are not interested in greenfield projects.
While problems persist for the construction sector, Gulabchand is optimistic about the government’s reforms drive, lauding the Cabinet’s decision to transfer at least 75 percent of the total arbitration award, as soon as the verdict is delivered and irrespective of whether any arm of the government plans to challenge it in a higher court or not.
The Cabinet committee has approved that if you wish to challenge an arbitration award, you will have to pay 75 percent of the award against bank guarantees. That’s the way a solution is reached. The Cabinet committee have recognised the problem and rectified it.Ajit Gulabchand, CMD, HCC