PM Manmohan Singh tells HT that never before have
so many steps been taken in such a short time to bring in transparency.
Here’s the full text of his written replies to an HT questionnaire.
On economy: We will bring clarity on all tax matters. We want the world
to know that India treats everyone fairly and reasonably and there will
be no arbitrariness in tax matters.
On charges of corruption: ...Bills
such as Whistleblowers Bill, Lokpal Bill, Judicial Accountability Bill
etc, which if taken in totality, will raise the standards of integrity
at all levels of government.
On his legacy: I have tried sincerely
throughout my life to make India a better place to live and work in ...We have an unfinished agenda. I will leave it to history to judge
whether I was successful.
Q1. How do you see the economic situation today and why have we come to this pass?
We are certainly passing through challenging times economically. This
did not happen overnight. A lot of it was due to developments in the
global economy. The developments in the Eurozone have been a major
dampener of global economic sentiment, till the Eurozone leaders
hammered out an agreement a few days ago. Europe is the most important
destination for our exports and any turbulence there will certainly
affect sentiment here. We then had the oil price rise. For a country
which imports nearly 80% of its oil, this badly hurt our trade balance.
In fact, a major portion of our trade deficit is accounted for by oil
imports. There were domestic factors as well.
Q2. What are the top five challenges to the economy in the year ahead?
The India Growth Story is intact. We will continue to work, as we have
been doing for 8 years, to keep the story going. Measures which I intend
to focus on, in the short run, are:
- Bring complete clarity on all tax matters. We want the world to know
that India treats everyone fairly and reasonably and there will be no
arbitrariness in tax matters.
- Control the fiscal deficit through a series of measures which my
officials are working on and on which we will build consensus in the
government.
- Revive the Mutual Fund and Insurance industries which have seen a
downturn. Absence of investment avenues has pushed Indian savings into
gold. We need to open new doors so that savings can be recycled into
productive investments that create jobs and growth, not into gold.
- Clear major investments in the pipeline awaiting FIPB approval.
Investors should feel that we mean business. We will also work towards
improving the response time of government to business proposals, cut
down infructous procedures and make India a more business friendly
place.
- Most importantly, we have given a major push to infrastructure,
particularly through PPP. A lot of investment avenues are opening up in
Railways, roads, ports and civil aviation. The doors are open for the
world to strengthen our hands and contribute to these vital sectors
which will give a further push to the economy.
Q3. How do you see coming elections in the states and the Centre affecting
policies? How do you guard against populist measures, given the size of
the deficit?
I am largely satisfied about the way we have progressed over the last 20
years. The fact that governments have changed many times in between but
economic policies have continued means that the direction that has been
set is seen to be the correct one by all parties. That is a source of
satisfaction also.
However, there are a few issues that come quickly to mind when it comes
to what else needs to happen. Firstly, we have yet to settle down to a
stable institutional framework to manage an open economy. Our
institutions are still evolving and it will take time till we see mature
institutions in all sectors as we see them in advanced economies.
Secondly, the logic of an open economy and its benefits are still not
widely understood among the general public. Public discourse still sees
markets as anti-public welfare. The instinctive reactions of many, both
in the political class and in the public at large, is to revert to a
state controlled system. There is no realisation that a reversal to an
earlier era is neither possible nor desirable. Even a neighbour like
China has understood the logic of an open economy and is developing the
institutional framework which is required for this. It is necessary that
we change the discourse from a critique of an open economy to a
critique of what is needed to make an open economy work better for the
welfare of the people.
Lastly, there is the issue of distribution. We have lifted millions out
of poverty. But, I worry that the fruits of an open economy will be
increasingly captured by fewer people. I worry that a large segment of
our population will be left out of the benefits of economic growth. We
need to correct that fast.
Q4. Foreign investors have been rattled by events such as the tax row with Vodafone. How do you intend to set their minds at rest?
The investor community had concerns on some tax matters. The finance
ministry, over the last three months, has been issuing clarifications
and working with the investor community to bring greater clarity on the
matter. However, there has been a slowing down of capital flows which
normally would have covered the current account deficit.
That does not mean things have turned very bad. Coca Cola has announced
to invest $ 5 bn in India just a few days ago. IKEA plans to invest a
billion dollars. The pessimism in the media and the markets is far more
than reality. Consumer spend is holding up and this has not been
affected by interest rates. The Chairman of GE captured the picture
correctly when he said "the mood in the market is worse than the mood on
the ground". I agree with that.
Q5. There is also a perception of drift, of policy paralysis. You have used
the term “coalition compulsions” is this the main factor? How do you
dispel the impression of drift? Do you intend to communicate more often
with the nation?
I think it is a matter of perception. We worked under far greater
constraints under UPA 1. However, there were a lot of things which had
been done under the previous government which we had to undo. We had to
bring a healing touch to the nation, make minorities feel secure and
included, and give emphasis to the needs of the common man who had moved
to the background in the Shining India of the NDA rule.
The biggest achievements of UPA 1 were the healing touch which we
managed to bring in and the focus on inclusive growth. We did this with
widespread support across the spectrum of parties supporting us.
But difficulties existed then as they do now. Parties are entitled
to their differences then and now. There were differences on the US
Nuclear deal and there are going to be some differences now also. I do
not think that the political landscape is radically different now as
compared to 3 years ago. What has changed is public expectation. Now
that the immediate problems caused by the NDA government have receded
into the background, other issues are coming to the fore. This is but
natural. That is the way of democracy.
As for speed, look at the way we responded to the 2008 crisis. We
rolled out a stimulus package which ensured that we came out of its
effects rapidly. We are passing through a similarly challenging
situation and I am confident, we will roll out measures to restore
economic growth once again.
Q6. In your role as finance minister what do you see as the roadmap
for key pending reforms such as pensions, insurance and banking reform,
the goods and services tax and the direct taxes code?
Firstly, legislation is not the bottleneck to economic growth.
Barring an issue here and there, most economic steps that need to be
taken do not need legislative action.
More important is that we need political consensus in the
government on some policies. These are genuine differences in opinion.
So, in a democracy, consensus building is the key to long term economic
success and we are steadily moving ahead in doing that.
Q7. Can we expect some of the young ministers of state becoming cabinet ministers soon?
You have to wait for a while for that question to be answered.
Q8. When will you go to Pakistan? What are the ideal circumstances that would make such a visit possible?
I am looking forward to visiting Pakistan. No dates have been
finalised for the visit. As you know there have to be suitable outcomes
for such a visit.
Q9. How do you react to charges of corruption during your Prime Ministership?
Never before in the history of India have so many steps been taken
in such a short time to bring in transparency into the functioning
government, make government accountable to the people for its actions
and bring in measures to control corruption. The Right to Information is
a landmark Act for which the Congress Party and its President will be
remembered for generations. In fact, this single act has done far more
to bring down corruption and bring in accountability than any other
measure. It is the information flowing out as a result of this Act which
is bringing a lot of corruption to light which would otherwise have
been hidden.
We have introduced a Public Procurement Bill which brings in far
greater transparency into government procurement and severe deterrents
for wrongdoing. This would remove a major source of corruption.
A number of other bills are there such as the Whistleblowers Bill,
the Lokpal Bill, the Judicial Accountability Bill, etc. which if taken
in totality, will raise the standards of integrity at all levels of
government.
Coming to the personal criticism, not only have I maintained a
high standard of integrity in my conduct, I have endeavoured to raise
the levels in the system as well. All these measures are a reflection of
our party’s will to tackle corruption. As for criticism by media, that
is their job and I compliment them for doing it effectively.
My only request to them is to exercise some balance and retain a
sense of proportion in their coverage of issues. Just as the pessimism
over the economy is more in the markets and less on the ground, even in
the case of corruption, I do not think there has been any explosion in
corruption under my watch.
Q10. What is that one thing that you would like to be remembered for?
I have tried sincerely throughout my life to make India a better place
to live, work and lead a fulfiling life. In some ways, I contributed to
this as a Finance Minister. As Prime Minister, I have had a larger
remit. I have worked on the same lines but on a larger platform. We have
tried to build a peaceful, harmonious, secure, friendly, prosperous
India where every citizen can aspire for the best in life. We have an
unfinished agenda. I will leave it to history to judge whether I was
successful.
This Interview appeared in Hindustan Times on July 08, 2012.
I've maintained high standard of integrity in my conduct'