lok-sabha-elections

Updated: Apr 05, 2019 08:14 IST

Union finance minister Arun Jaitley spoke to Shishir Gupta and Rajeev Jayaswal about a range of issues including the Reserve Bank of India, economic growth, the Congress manifesto, Kashmir, and electoral bonds. Edited Excerpts:

In 2014, the repo rate was 8%, in 2019 the repo rate is 6%. In your view, whether an economist is the better choice as RBI governor or somebody who has done education in history?

I don’t think you can give a generalised reply - you’ve had many civil servants who have been RBI governors and they were not necessarily economists. They had handled economic departments. Dr CD Deshmukh was a legendary governor. His education was in natural science and his area of specialisation was Sanskrit. The present governor [Shaktikanta Das] has been a history student but if you’ve spent 35 to 40 years of your life in the management of the economic activity in the country, right from the tehsil to the district to the state capital to the Centre, you know the country a little better. You also had some very good economists as long as they knew India well, and I think what’s more important is not to be dogmatic and become a prisoner of a particular image but to act as per the immediate requirements, the fundamental requirements of the economy and the market.

RBI has reflected some uncertainties, and said there were some signs of domestic investments weakening. It has reduced GDP forecast from 7.4% to 7.2%

These are periodic assessments that they do and they keep revising it. Ultimately, estimates are estimates, situations change also. For instance, there’s a certain drop in automobile sales but then the fixed investment is up by 14.7% in the non-food sector. Credit has gone up. That’s an indication of investment. With the kind of infrastructure investments, both national urban and also rural infrastructure that we have been doing and which has been planned over the next five years, there’s going to be a very large economic activity.

There are forecasts that there will be El Nino effect and inflation will rise.

Let’s wait for the meteorological department’s predictions also, and when you look at this, you have to see the spread of the monsoon and where the dry pockets are. If the dry pockets are in your key agricultural goal areas, it’s a serious concern. But if they’re on the margins, every year some areas will be stagnant.

Economic growth is a work-inprogress because many of the measures are medium- to long-term. How does one communicate this to an electorate that wants results quickly?

Let’s not underestimate the electorate. India’s electorate is shrewd… Take rural India - in infrastructure they got roads, they got cooking gas, they got toilets, electricity and some got houses. And then they got health care. They are aspirational and they know everyone will have a house in the next three years. Every home will have a tap. Every village or cluster of villages will have a playground. Similarly, you are now, in terms of seeds, fertilizers, electricity, subsidising the farmer, you’re partly subsidising his insurance. You’ve increased his MSP but the market gap still remains. He knows the government will take all steps that his gap reduces. You have started by increasing his income support. As the government resources increase, I’m quite sure the government’s ability to spend more on each of this will increase. In infrastructure, if you can build 10,000 kms of highways, you can get more Metros, better cities for urban life. These are areas of growth - obviously all this is going to be increased.

Talking about the BJP manifesto, you said the other day it is going to have specific goals.

Let’s wait for the manifesto. I can’t comment on that.

In 2014, the BJP was against a divided Opposition and people at that point also thought that there was no way but ultimately turned out there was a way. This time, there’s a partially unified Opposition. Do you still see a wave for the BJP?

When every poll is indicating a 60-70% approval rating of the Prime Minister, and the undercurrent is that we want Modi back. How do psephologists transfer it to the number of seats? I think traditional arithmetic doesn’t matter here. The chemistry of state politics has changed .

Now when you look back at the last five years, do you think the bureaucracy performed well with you?

They were used to a different culture but I don’t have any complaints. I think there has been a fairly competent civil service, may be a few exceptions, but by and large I can’t find any programmes we have been handling that have been hindered by them. Bureaucrats of some states have done it for political reasons.

Congress has talked about the NYAY minimum income guarantee scheme in their manifesto. Is it feasible?

It’s a bluff in every sense. Total DBT [direct benefit transfers] that Centre and states are giving - it’s more than that. Will that be counted towards income? Supposing in Telangana, the total DBT is 15% in the poor man’s account, will that 15,000 be part of the eligibility criteria or not? If it is yes, the scheme is non-existent. And if it is no, then for working you get more than what the minimum wage of the country is. Secondly, where do you get the resources from? Is it over and above? The manifesto says only merit subsidies will stay. There are 950 subsidies, and you can declare any one of them as non-merit. So there’s a catch. Secondly, it says it will be a Centre-State scheme, you are already washing it off your hands. And advisors to Rahul Gandhi -- Abhijeet Banerjee and now Sam Pitroda -- I have heard both of them on television saying probably taxes will have to be increased so that’s the only way.

We have consciously tried to strengthen India’s middle class. With every budget, we have increased its spending capacity by liberating it from taxes. We brought indirect taxes – GST [Goods and Services Tax] down. For housing , we have brought it down to negligible level. The future of the Indian economy is the middle class and the neo-middle class and today’s poor should eventually become a part of that. And the Congress manifesto -there’s not a single word nor a paragraph nor a sentence on India’s middle-class whose purchasing powerwill make India dominate, not only domestically but also internationally.

In fact, Rahul Gandhi’s statement yesterday is the most obnoxious statement ever given by a serious politician. He said we’ll fund it by collecting it from the ‘chor’ businessmen that Modi patronised.

Peoples Democratic Party chief Mehbooba Mufti has said that if you remove Article 370, it means the area will be India-occupied Kashmir.

It’s a preposterous suggestion. I think Kashmir doesn’t belong to Mehbooba Mufti. The two mainstream parties of the state are letting both the state and people, the Kashmiris, down. They are also letting India down. They can’t run with the horse and hunt with the hounds. Our priority is peace, security and progress in the Valley.

And today, we’ve started enforcing the rule of law, after all the steps we have taken in the past two-three months, there’s absolute peace in the Valley. Let’s first correct the mistaken notion of history – neither Article 371 nor 35A… Article 370 was not a part of the instrument of accession, which took place in October 1947. Article 35A was surreptitiously slipped in 1954.

There’s no provision for secession of any territory from India. Some constitutions have it, India doesn’t. No Indian or any government can do it. This is as absurd an argument as suggesting that if the Westminster was to repeal the Indian independent Act, India will lose its independence because the document through which you got it has vanished. So you’ll be back to August 14, 1947.

Former home and finance minister P Chidambaram has talked about AFSPA [Armed Forces Special Powers Act] and questioned you on it.

The UPA [United Progressive Alliance] failed to normalise parts of Tripura, Meghalaya and Arunachal, we normalised them. It’s only then that we withdrew AFSPA. Is the situation in Kashmir comparable? When a terrorist is killed or arrested and his family asks for prosecution of the officer, don’t say that you killed an innocent man. Today there are 1,799 complaints in the past several years. If you accept the Congress manifesto, you will have 20,000 officers not defending the country but facing trials .

The Congress talks about repealing the sedition act. What is your view?

Jawaharlal Nehru, Indira Gandhi, Rajiv Gandhi, Narsimha Rao and Manmohan Singh were also wise people - they wouldn’t have gone to the JNU’s [Jawaharlal Nehru University] tukde-tukde function. Why did they not repeal Section 124A? You have people openly talking about secession of India. And what signal do you want to send by saying that it should be repealed. Chidambaram argues prosecute them under the Unlawful Activities Act that’s the catch. Whenever he says something, look at the detail, the devil is always there. The Act to all these offences now applies the CrPC [Code of Criminal Procedure]. The Congress says the CrPC will now make bail the rule and jail the exception. That’s where he’s going. The Act doesn’t have the provisions of the earlier anti-terrorist laws.

On NITI Aayog, Rahul Gandhi has said it should be scrapped.

According to me, it is too late to go back to the regulatory days. The Planning Commission was born out of the regulatory mindset. It should have disappeared two decades ago. I have a suggested a council-like structure for agriculture, rural development and health care. And I am glad that my idea finds a mention in the Congress manifesto.

There is opposition to electoral bonds from other parties…

The original system was 100% cash, 100 % non-transparency. Who’s the donor is not known, who brings it is not known, how much is pilfered is not known, how is it spent is not known. This merrily went on for 50-60 years. And all black money. Today we have said people can, by cheques or electoral bonds, get a tax rebate. Cheques you can pay directly or you can pay an electoral trust to mask your identity and the trust will distribute to whichever political party.

Who brought the electoral trusts? Mr Pranab Mukherjee in his budget. So masking the identity was the idea of the Manmohan Singh government. Otherwise people would say my identity as a donour is disclosed, I go back to cash. We have now added electoral bonds , what does that involve — payment by cheque, disclosure to the State Bank of India, disclosure in your own balance sheet. Bonds go to the political parties and get exhausted in 15 days.

The political party must have a single declared account which the EC [election commission] monitors and must file annual election returns to the commission – it’s 100% white money and improved transparency.

The only area where transparency is not there is how the buyer of the bonds distributes them or give them to a political party.

The political groups that are criticising it are the ones which prefer cash over declared money. The NGOs that are campaigning are well-meaning but they never have a solution for anything. They have a problem for every solution. They never suggest a solution.