Q. How best will you describe the performance of the NDA government?
Deeply disappointing. I do not see any positives, and I’m not saying this because we are in the Opposition. This government has come to power based on the lofty promises and dreams that were sold to the people. The prime minister (PM), in particular, promised literally the sun, moon and the stars, especially to the youth, women and weaker sections. We have to compare the outcomes.
I’m not saying all the promises need to be realised, but have they moved in the right direction? In most of the cases, it is the reverse, and that’s why the disappointment is deeper.
What we are seeing is not a grand vision but very successful rebranding and repackaging. There’s nothing that can be claimed as original so far, but at the same time, when it comes to event management and publicity propaganda, I give full marks to the PM. It is one area in which he has performed exceedingly well for himself. But that’s not helped the country, people or the Indian economy.
Q. Can you be more specific?
There’s talk about a surging economy. During the 10 years of the UPA, we grew at an average of 8.5 percent and became the first country in the world to quadruple its GDP. Where we left, as per this government’s own admission, was 6.9 percent by the new methodology.
After 20 months, there has been a downward revision even of last year’s number. Mid-term economic survey has again downgraded GDP growth projections. If you go by the old methodology, then it is 5.2 percent, compared to 5 percent. Therefore, it is almost a flat growth rate. There were very strong global headwinds throughout the tenure of UPA-II. Besides GDP, currency devaluation is 9 percent.
[When] PM [Narendra] Modi was campaigning, he insulted Manmohan Singh by saying the rupee is moving towards Singh’s age. When he assumed office, he said the rupee was on ventilator. That was at 59 to a dollar; today it is 68-plus.
Domestic investment is perhaps at its lowest in the last two decades. Credit off-take in India is the lowest in 20 years. If you have the core sector falling continuously, it means you’re losing tens of thousands of jobs. Demand is low. Exports are in a free-fall for 13 continuous months, once they tinkered with the earlier policy, which had predictability and stability. The fall is the steepest since Independence.
Growing NPAs [non-performing assets] of corporates is another disturbing thing. Huge external commercial borrowings have been allowed. The debt to GDP ratio was 63 percent in 2004; when UPA demitted office, it was 48 [percent]; in the first 18 months of this government, it has climbed to 57.6 percent.
Q. The government, in your opinion, has squandered the opportunity presented by favourable macro-economic conditions and low oil prices.
Falling crude prices have been a great saviour. If they had not fallen, given the performance and lack of vision and thrust, the economy would have been in the ICU.
Q. Why do you think this has happened?
There is a dearth of talent when it comes to comprehension of issues. The PM himself doesn’t understand economy, or strategic issues. He has administrative experience as a chief minister, but his priorities are wrong. In a country, which has a large number of poor people, they have dealt a body blow to the social sector by reducing the budgetary allocation to it.
Q. Why has the government not been able to take the Opposition along?
How can you have constructive engagement when you want to abuse us? The PM has remained in the confrontational mindset of his election campaign. He has not realised that now that he is the PM, he cannot berate, provoke or target the Opposition and then expect healthy cooperation. The PM thinks that before him, India didn’t exist or command respect and goodwill.
Q. Congress claims it is playing the role of a constructive Opposition, but often it appears to be obstructionist.
Not obstructionist, but if they continue to behave in this manner and not engage with the Opposition… there are issues on which accountability has to be fixed, and it’s our right to demand that and the PM’s duty is to respond. If he refuses, there will be confrontation.
Q. What do you think the government should be doing about exports?
They have now, belatedly, realised that they were wrong in doing away with interest subvention. There had to be targeted incentivisation—which we were doing product-wise and market-wise—and diversification of markets. They should call those officers who handled Indian exports and were part of our teams, and they will share their best experiences with the government.
Q. Should the rupee be allowed to depreciate further, especially in the context of China devaluing the yuan?
No; that would, in the long run, hurt the Indian economy. We are not an export-surplus, but an import-surplus country. You will be importing in dollars, [so] we’ll end up paying more. The cost of travel, foreign exchange, student loans, education abroad will be more. It’s very simple to say, ‘Let’s devalue it’. But what are the spin-offs? They are negative.
Q. What is your view on some of the major policies such as UDAY, Start-up India and Make in India?
Make in India is not a policy; it’s a programme. The policy is the National Manufacturing Policy of October 2011. I was the minister responsible for it and that’s the forward-looking policy which will make India a manufacturing hub of the world. Make in India of September 25, 2014, was pure repackaging.
Invest India is a not-for-profit company, a joint venture between the government of India and the industry, [with] Ficci being the chosen partner, [created by] a cabinet decision of January 1, 2010.
The e-biz project was announced in the Foreign Trade Policy on August 26, 2009. The portal was launched at the Agra Partnership Summit on January 28, 2012, as a platform of common delivery of services. A few services, which didn’t come on board, were left out, and some, such as excise and customs, and environment and forests, have been brought on.
The cabinet approved all four industrial corridors before Modi became PM. The National Manufacturing Policy’s principal objectives were to raise the share of manufacturing in India from a low of 16 percent to a minimum of 25 to 26 percent and create 100 million jobs in 10 years. So, there is no new policy.
Q. So, the government is continuing the policies rolled out by UPA?
We did all this work, but what we didn’t do was marketing. We thought we were doing our duty and we failed there. The PM is boasting about what is actually not being achieved.
Startups were happening [during UPA governments]. About 250 of the top 500 global companies had established R&D bases in India before 2010. New solutions were being worked out. Subramanian Ramadorai was heading Skills India then and even today. Modi condemned UID and Direct Benefit Transfer when we did it, but now he is embracing it because he realises that this is a great thing.
Government is a continuum, so there were many things that were there, which are being taken forward, which includes financial inclusion. The Bima Yojanas were also there. The government is ideologically and intellectually being dishonest by not telling the country that it is taking forward what had already been rolled out. You may give that a name [UDAY], but a name will not revive the state electricity boards.
Q. What is the Congress’s stand on GST? Do you see it becoming a reality anytime soon?
We are the authors of the GST, and it will become a reality. What they [the government] are bringing in is not a perfect GST. The objective of the GST is to bring down transaction costs and provide a common market. When you keep petroleum out, which is the biggest multiplier in transaction cost, it is one dampener. Keeping alcohol and electricity out [are other dampeners].
The government has indicated that they agree to two of our demands, but has not given a formulation on the dispute addressal mechanism. We have asked for constitutional protection; if not, what kind of legal fencing will there be when it comes to the percentage cap on the GST.
The economy didn’t go into deep freeze when for five years they [BJP, while in Opposition] didn’t allow [the GST]. We have given suggestions, they didn’t even do that and said they would oppose it. Implementation of GST will take time.
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(This story appears in the 04 March, 2016 issue of Forbes India. To visit our Archives, click here.)