Here's full transcript of the interview:
SHWETA RAJPAL KOHLI: A strong Indian delegation from the government side is here in Davos to sell the India story ... And who better than Mr. Praful Patel to tell us how hard that task is. Sir, how difficult is it to sell the India story after the kind of slowdown that we have seen?
PRAFUL PATEL: Things are certainly different from what they were 2-3 years ago. At that time, everything about India was like the flavour of the season ... I don't think anything is wrong fundamentally and people are not buying the India story anymore. The fact is that ultimately India is the most favoured destination regardless of whatever the economic conditions are globally and even within India. And, of course, it's a large market and we have some good news for the international community, especially with the foreign direct investment (FDI).
SHWETA RAJPAL KOHLI: ... nobody can afford to forget India, but that clearly isn't enough. The government needs to do a lot more to attract foreign investors, whether it's the institutional investor or FDI; or do you think the India story has taken a beating over the last few years?
PRAFUL PATEL: I think it's slowed down a little bit. We cannot ignore this, but the fact is that I don't think we oversold India... Nothing so ... I think India is very much still recognised. In fact, we all are here to let the world know that we certainly mean business and that India has got strong fundamentals and everything is not as people portray it to be. I don't know why we are talking about India in specific when the whole world has slowed down and everybody recognises that it has had an impact on India.
SHWETA RAJPAL KOHLI: But the world slowdown should have been an opportunity for India, which we seem to have missed...
PRAFUL PATEL: No, I wouldn't say missed, but certainly that we could have done better. In the last 2-3 years a lot of negativity has set in within our country for various reasons starting from the 2G issue and the subsequent events. I think basically the reason why we were not up to the mark is that somewhere we have lost the momentum ... but then, you have to acknowledge the truth.
SHWETA RAJPAL KOHLI: I am glad that you are admitting, and are not in a denial mode unlike many policy makers. Many from the government always seem to be in the denial mode and say India is doing better than the world and that's enough. Do you see all these issue playing in the global platform like Davos. Concerns about how badly India is slowing down on policy paralysis and other issues, whether it's corruption or women's safety.
PRAFUL PATEL: ... Even I was very surprised. I was at the headquarters of FIFA this and one of the key discussion points was the sad incident in Delhi. This incident I am sure has caught the world's attention. But that's not something which people look at as a negative for India. I think it's a societal issue. These are the issues that need to be dragged, but that's not withstanding on the other side. I think people did feel that India could have been more on the fast track in the last few years. I think that confidence has not been lost. I think that will be too extreme a situation if we feel that people have lost confidence.
SHWETA RAJPAL KOHLI: That certainly hasn't happened. You are saying that we were on the right track. There are also worries that the political window of opportunity is now a narrow one. We have lost the precious time and there is very limited time for the UPA government to cover all the lost ground.
PRAFUL PATEL: As we get closer to the elections, things change, and everybody looks at it politically and doesn't want to take the hard decisions. In spite of that, look at the major decisions that have been taken in the last six months, right from the FDI to diesel price decontrol. I think even on the fiscal deficit issue the Finance Minister has been taking a proactive line to see that it's contained and we don't get downgraded.
SHWETA RAJPAL KOHLI: So, for tough political decisions we have to wait and see if that momentum continues or not. The people understand the need for the increase in the diesel or railway fare and political parties across the spectrum, including allies, do understand and back the government on some of these tough decisions...
PRAFUL PATEL: As an ally I can say that we were very responsible in terms of understanding what is good for the country. To a large extent we have gone out to support every initiative of the government and we are a part of it so we can't be in dual state of mind. But then I think that in the overall context of the country, there are distinctly two sides of a coin. If you look at the middle class, I think they have been hit the hardest because they have very little flexibility as they have a fixed income. On the other hand, if you look at the farmers in India they have been better off than they used to be 10 years ago, with more disposable income.
SHWETA RAJPAL KOHLI: But there are also farmer suicides that are happening. So, this part of the story is not getting highlighted, but the fact that the overall living conditions of the farmers have improved even though we have seen higher inflation...
PRAFUL PATEL: It's a large country. You can't expect everyone to be painted with the same brush. A large part of India has gained and benefited in the last couple of years. Not only that, I will say that the rural landscape has also shown improvement. There have been many schemes rolled out by the government, and ultimately the benefits do reach the rural India. Even if somebody earns Rs 100 or Rs 150 a day via MNREGA or any of the schemes of the government, the benefit will trickle down to the market and thus enhance the buying power of rural India.
SHWETA RAJPAL KOHLI: Let me talk about the political temparature back in Delhi that seems to be heating up. We have seen Rahul Gandhi's elevation as the vice president ... We have seen BJP making up its mind on Rajnath Singh. Your thoughts on some of these very critical political developments...
PRAFUL PATEL: Well, I think Rahul Gandhi's elevation was just a matter of time. It was being talked about for a couple of years now. So, good for the Congress party.
SHWETA RAJPAL KOHLI: And he is the PM-in-waiting in many ways...
PRAFUL PATEL: I think it's their call. We don't want to get in the issues of the Congress. That apart, I think clarity on the future succession in any political party has been put to rest, even for the BJP. Ultimately, these are the two poles around which other political parties will go around. It's important to see the clarity in the political side so that future conduct will be played on the basis of what happens to these two major political parties. Rahul Gandhi's elevation within the Congress party has put allegations to rest.
SHWETA RAJPAL KOHLI: As an ally, are you happy with this decision?
PRAFUL PATEL: How are we concerned.
SHWETA RAJPAL KOHLI: Given the elections in 2014...
PRAFUL PATEL: No, we are happy because the Congress has taken the decision as far as we are concerned. We are apart of the UPA. One thing is certain that no matter what anybody says the fact remains that coalition governments will remain for a long time in the country.
SHWETA RAJPAL KOHLI: Even more fracture verdict in 2014 as many say...
PRAFUL PATEL: While we hope not, it does look like that the political play in future will lead to fractured politics.
SHWETA RAJPAL KOHLI: Alright, so now the big focus remains the economy, and bringing the economy back on track and of course selling the India story is something that you are going to do in the next few days here. Thanks so much for sparing time to talk to us, sir.
PRAFUL PATEL: Thank you.