A strong reversal as US markets, what do you make of all this? You know how sometimes during a long flight, the pilot comes in and says there is going to be turbulence ahead, put your seatbelts on? We are in that phase of the flight where there is turbulence ahead. There are going to be ups and downs and though once in a while you may crash in the ocean, most of the time you are going to have a safe landing. That is the way you have to think about it. There is turbulence in markets, you have to live with that. That is why you get a risk premium sometimes. We forget what the definition of risk is until you are in a period like this. This is why you should be demanding a premium when you invest in something risky.

On inflation in the U.S. Inflation is back, but it is 2%, which is not astronomically high inflation. It is actually inflation that is consistent with a healthy economy. When we talk about inflation, we have to realise that part of the reason of inflation is the fact that the US economy is finally delivering wage increases. For a decade, we talked about how low level labour is not getting any kind of an increase, any benefit from globalisation. Now that they are getting the wage increase, of course it is going to show up as inflation. To me, inflation is a sign of a healthier economy and that in a sense is something we all want.

Are Indian stock market and US stock market cycles are different because for India, the economic recovery has not kicked in and for the US, the economic recovery has kicked in? If we look at the first week of February, pretty much every market in the world was affected. During the crisis period, the correlation across markets tend to go up. When the crisis recedes, local factors kick in and India perhaps has a lot of local factors kicking in. You have got banking reforms. You have got an economy that is fuelled with change right from demonetisation to the opening up of sectors to global competition to banking. You are seeing changes in India that are going to affect that market. In a sense, this might be the start of an Indian decade, just like the last 20 years had been China’s. Maybe this is the start of something big. Of course, these things can very quickly change.

On Indian banking sector: The cleaning of the banks is going to be the major issue. Anybody who has any degree of familiarity with the Indian banking system knows how much of a big bank loan system was based on lending where banks did not do their due diligence. It will be interesting to see how big a problem it is because I do not think we even know how big it is until we start digging. Cleaning up the banking mess is never going to be without consequences. It will be painful

View on the Tata Group companies under the new chairman : I have been very impressed with Chandra because I think in a sense he comes to a position of strength. When you are the person who has built up the company that accounts for 60-65% of the overall value of the group, you are going to carry a lot of weight and because of that, people have been much more willing and the family has been much more willing to give him the power to go out and make changes.

Which Indian companies can move independently of what is happening in the world? A lot of Indian companies have an advantage which is you have a growing economy with a huge population. Indian companies can exploit the growth in the economy, kind of hang in there, even mature Indian companies like Britannia, food companies that are able to grow with the economy are going to be able to show high growth in revenues and earnings simply because they are benefitting from the growth of the economy. Indian companies have sometimes forgotten that their biggest and most lucrative market is at home.

Do you think Indian IT companies can reboot themselves? What made these Indian IT companies successful in the 90s and the last decade was the fact that their costs were lower than their foreign competition. But at some point in time, your cost advantages will go away. If I were advising Indian IT companies, I would say, “You have to change your orientation from just cost cutting and having the lowest cost to delivering more innovative products.