Prakash Mehta Discusses Challenges in India with The Deal
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For its article “Reform hopes ride on India's elections” on upcoming federal elections in India that may result in more-stable government and possible reforms The Deal interviewed Akin Gump investment funds and private equity practice co-leader Prakash Mehta.
On the topic of one challenge to reform in India—the heterogeneous states, ethnicities and religions that comprise the country—Mehta said, “In many ways, India's not really one country. Think of it as more like Europe, as a collection of different states with different languages and cultures. If you think of how difficult it is for 28 European Union nations to reach a decision on anything or steer a common course — well, why would it be different for India?”
Regarding the country’s accumulating nonperforming loans, he noted, “I don't know what this paper will mean in real life terms, but folks in India know that the banks are not likely to release assets at tremendous discounts.”
Mehta also discussed another challenge to India’s growth: local entrepreneurs’ reluctance to give up equity: “They will do almost anything, even take a loan, rather than give up equity in their businesses because they are expecting growth in their companies. And if you give away equity, you're giving away some of your profits.”
