The Hindu Business Line : Keep investing abroad, India Inc told

Investment call: Mr Michael R.P. Rayfield, Vice-Chairman, Investment & Corporate Banking, BMO Capital Markets, and Dr Ashwani Kumar, Minister of State for Industry, at a meeting in Mumbai on Monday —

Our Bureau

Mumbai, Nov. 3 Even as many corporate houses are squeezed for funds, Mr Ashwani Kumar, Minister of State for Commerce and Industry, advocated that companies should take advantage of the attractive valuations and invest part of the profits made in the last four years to acquire assets abroad, thereby gearing up for the next uptrend in economy.

Addressing a seminar on ‘Global Metals and Mining: Merges and Acquisition Perspective’, the Minister said valuation plays an important role in acquisition of mines as no geological survey can exactly predict what is lying below the earth.

Globally, he said, the mining industry is dominated by a few large companies that dictate prices. However, in India, the Government has taken a conscious effort to prevent cartelisation in the mining industry by encouraging many small and medium firms to enter the fray.

Agreeing that India has not been making significant investment in the mining sector, Mr Kumar said the industry, which was dominated by family-owned business houses, will be boosted by the new mining policy and receive more investments.

The role of a regulator should be more of a facilitator than that of a law enforcer, he said and added that domestic regulators have solved some purpose, but they should work cohesively with the industry to ensure productivity and smooth functioning.

Rehab issues

On investments in the mining sector being delayed due to issues over rehabilitation of project affected people, Mr Kumar said the problem will be addressed if the relief and rehabilitation package proposed by the Government is made law by Parliament.

India Inc might be facing problems on the export front as the US accounts for 75 per cent of the total exports. However, the domestic demand is quite buoyant with headline inflation rate already moderating; further Government plans to attract $500 billion investment in infrastructure over the next five years remains intact, he said.

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