'Focus On Manufacturing Sector Is Right Step For Growth'

Indian steel baron Naveen Jindal, Chairman Jindal steel and Power Limited was one of the delegates at Indian’s National Competitiveness Forum 2017. Inc which is a discussion platform aimed to set the agenda for India’s growth and competitiveness by engaging top leaders, renowned thinkers and government leaders. In a conversation with BW Businessworld Jindal spoke about the much hyped Chhattisgarh power plant deal, JSPL debt and the potential of the services sector to make an impact on our economy today. Edited excerpts from his interview.

How is the deal of Chhattisgarh power plant going?
Very well, the deal is progressing, there are a lot of permissions, clearances, and there are a lot of conditions that we have to meet before we conclude the deal. There is still one more year to go and we hope in that time we will be able to complete it.

How much is your current debt and how do you plan to reduce it, and what are your strategies for the same?
Right now the debt at JSPL is around Rs 26,000 crore and JPL has a debt of only Rs 8,000 crore with a 3400 MW so it one of the lowest debt company, internationally as well. Things are much better now we are able to service the debt. If the steel demand continues we will be able to overcome the debt, our debt is only coming down now. We have reduced our debt in FY 17.

How much was your debt two years back?
Our debt increased basically after the cancellation of coal blocks and we basically had to pay 3 and half thousand crore of additional levy’s, so we had to borrow to pay those levy’s, that is why JSPL’s debt is so high. And that is the only reason for debt, it wasn’t because of any failed project or anything but only because our cost went up because of cancellation of coal blocks and the additional levy. Now we are increasing our production, there is increase in demand, government has taken a lot of good initiatives to build infrastructure in the company. So we are hopeful that in the times to come our debt will be further reduced.

You spoke about standalone debt, what is the status of your consolidated debt?
It is about Rs 46 000 crore. In the next four to five years we hope to be a relatively debt free company, it should not be more than three times of the EBITA of the company. This reminds me of a Shakespeare line ‘neither borrower nor lender be’.

Do you think the services sector has the potential to make a strong impact on our economy today?
The services sector has already been playing a very important role in our economy, and it is doing pretty well now. Any economy progresses from primary which is Agriculture to secondary i.e. Industrialisation to tertiary which is the services sector. India is now moving to the services sector without having that Industrial revolution. We really need to focus on manufacturing because that is really where millions of our youth which is going to be employed.

How far do you think competition in India between the public and private sector is benefitting us?
Well, the government is doing a lot and I am hopeful that all the initiatives taken by the government do bare results. As far as the competition between public and private sector is concerned, I would say at some places it proves to be a good idea and it is a little unfair in some sectors.