MUMBAI: Veteran banker Deepak Parekh has suggested that states should take steps to lure Japanese companies that are being pushed by their government with a $2.2billion incentive to relocate from China. The states could offer the Japanese companies land with permissions and access to utilities, he advised.“We should make it easy for the Japanese to come to India rather than them going to Malaysia, Vietnam or Thailand. States have to take the initiative and offer them 2000-5000 acres in some special zone where they do not have to look for land or building approvals,” said Parekh. Japan ’s incentive to companies is a part of its stimulus package announced recently.The chairman of the country’s largest housing finance company HDFC also warned that the Covid-19 crisis could result in real estate prices correcting by as much as 20% as cash becomes king.In a webinar with businesses on Friday, under the aegis of Entrepreneurs Organisation, Parekh pointed out that central banks, the world over, are buying commercial paper and debt issued by private entities. He said the Reserve Bank of India is pushing money into banks that are reluctant to invest in the debt of private companies and when they do it is at very high spreads. “Liquidity is a big issue for state governments, corporates and non-banking finance companies. RBI has to give stand-by limits to non-banking finance companies in case of an emergency,” he added.While there have been repeated demands from several quarters that the central government should let go its fiscal deficit and print more money, Parekh highlighted the downside of this move on the country’s credit rating. He said that the US is raising 10-year money at 0.77%, while India with a BBB (lowest investment grade rating) is paying well over six per cent. A single notch downgrade could push the country’s rating into the junk investment category.According to Parekh, cash is no longer trash and is now king. “Leverage is a double-edged sword. In good times it amplifies profits but in bad times it can destroy you,” he cautioned.He also advised businesses not to worry about controlling stake but to raise equity by selling at prices that investors looked for. He said that burning cash would no longer be in vogue and investors would look for companies with tangible revenues and profitability.Another outcome of the crisis, according to Parekh, would be ‘deglobalization’. He pointed out that European countries have already made it mandatory for government approval for all acquisition as valuations have crashed and there is a fear of the Chinese takeover of European companies.