Union minister Piyush Goyal was the guest at Express Adda held at Royal Western India Turf Club, Pune, last week . In conversation with The Indian Express National Opinion Editor Vandita Mishra and Anant Goenka, Executive Director, The Express Group, Goyal spoke about going digital, transparency in political finance and making development inclusive.
Somebody may choose to call it organised loot, but if Rs 18,6000 crore lost in the Coalgate scam or Rs 17,6000 crore lost in the 2G scam and other scams like the Common Wealth Games, and AugustaWestland were not organised loot, then I don’t know what was. Prime Minister Modi has come to this decision with a great deal of thought and with a commitment to cleanse Indian society of black money, corruption, and dangers of counterfeit notes, which fuel terrorism and drug cartels. It is probably the largest action taken in the history of mankind. One of the biggest impact that we hope this move will have is on the mindset of people. The chalta hai approach has to change some day. It’s a once-in-a-lifetime opportunity for a nation as large as India to think differently, to try and leave behind a legacy for the youth of India, which is different from the one we inherited. We would like the colour of currency to be one. We would like the transactions to be in one currency, one legal format.
On the expected drop in the growth of GDP
In the short run, there will be a drop. Some of the things that amazed us was that two-wheeler and car sales have dropped. I can’t imagine that cars and two-wheelers were also being sold in cash or were being sold with illegitimate money. That fall in the sale is what we call short-term pain. But, if we move towards an economy where everybody starts buying two-wheelers, three-wheelers, and four-wheelers with honest money, that’s the change we are trying to bring. I think in the long-term, we can clearly see lower inflation, lower interest rates beat improved investment climate. A lot of international foreign firms would love to come to a country where business is done honestly.
On the transition to a cashless economy
When you are talking about a cashless society, you are aiming at one which is near cashless. Currently in India, we have about 71 crore debit cards and 26 million credit cards. Over 450 million of them are used only for withdrawing cash from an ATM. Hardly 45-50 million are used for transacting through that debit card. It’s an unfortunate situation. Each cash transaction costs Rs 55 to Rs 70. So if we see nation as a whole, there is a potential of Rs 20,000-plus crore saving if we are able to convert a large part of our transactions to digital. Lastly, honest payment of taxes — a society where traders, businessmen, industrialists, everybody has equal opportunity. So your ability to succeed in a competitive world is not judged by how much tax you evade but is determined by your service quality, your product quality. I think that’s the kind of society digital payments can bring about.
On transparency in political finance
When Finance Minister Arun Jaitley was law minister in the NDA government 12-13 years ago, he had brought in an amendment to the Income-Tax Act and to the Companies Act by which he allowed corporates to give political donations by cheque up to 5 per cent of their average net profit of the previous three years to any political party, provided it was an Indian company. And every rupee you donated by cheque, gave you 100 per cent tax deduction. In the last session of Parliament, we liberalised it further. Recognising that we now have a large number of companies that have foreign investments, we said that any Indian company, can donate up to 7.5 per cent of its net gain, after a tax average of the last three years. Now to my mind, every conscientious citizen (individuals can get 100 per cent tax deduction on the amount donated), corporates, companies, and businessmen should understand that a good political system, a good political leader and a good political party is good for our lives.
On the secrecy, alleged lack of preparedness
There was no way we could have sorted all the preparations because then it would have leaked out and would have had no impact really. I don’t know how many people knew about it. Certainly it came as a shocker to me and my colleagues, except for Finance Minister Arun Jaitley. Some Opposition leaders may suggest otherwise, but I can reassure you that proper processes were followed. Having said that, to keep it secret was bound to cause some pain. It is very easy to say we could have printed more notes. Super smart chartered accountants could have cracked it immediately. The business community is even smarter, they would have caught on to it. Forget all of that. Imagine keeping a secret from the media, that’s even more difficult. I will tell you a small secret. In 2014, when the Cabinet was announced, there was a lot of speculation but nobody could get the names right. In the past, we have always had Cabinet lists leaked. This time, not a single person knew. No typed list was ever made. The power was with one leader, one man. Nobody could dictate to him, be it a journalist or a corporate bigwig or an extraconstitutional authority. The PM has again and again demonstrated tremendous ability to keep official secrets.
On the success of GST after demonetisation
If at all one looks at the framework of GST, it could never have been successful if we allowed a parallel currency and a parallel trade to continue and flourish. It’s important to create a level-playing field where everybody pays the same taxes, then tax rates can also come down. So GST will actually be more successful after the demonetisation move. We have large teams already working on the network (GSTN) which will run the GST story. Given that we expect to get good tax collection or money which never comes back into the system, I feel it will help the government give good stimuli to the economy, and look at measures to improve health facilities, education, public welfare activities for the deprived sections of society, all of which will help India go towards a more inclusively, prosperous society.
On UP elections and a possible JDU-BJP alliance
When my esteemed colleague Naresh Agarwal (Samajwadi Party leader) said that this move has been made keeping UP elections in mind, I asked him, ‘Have you already given up?’ If you are saying that it’s a bad move, then you should be happy. If you are saying that it’s done looking at UP elections where we are the frontrunners, then obviously you accept the fact that people of India are happy with this. I am glad Nitish Kumar has realised that the people of India support this move. He has shown that he is able to take a decision which may not be politically palatable (by opposing the Bharat bandh) but which is in the interest of India. On an alliance possibility, that should be posed to Nitishji. But I have always thought that will be one marriage which will be very rocky. About it happening in the near future, well, we are opposed to triple talaq. But an honourable divorce, if the situation so desires, is permitted in the Constitution of India.
On the way PM Modi functions
He is probably the most non-interfering leader that I have worked with. He has an ability to come up with out-of-the-box suggestions. Once I had gone to discuss with him the coal block auctions. I told him that I will take 90 days from the day of opening of tender to its completion. He asked me ‘Why do you need 90 days?’ I told him it was a complicated project and required me to be careful and maintain transparency. He said, ‘So if you will do it in 30 days, will it become a dishonest project?’ He is a man in a hurry to see a prosperous India.
On regrets as the government reaches its half-way term
Every single day we get up with a lot of regrets, a lot of things which we could have done better. I think the day we stop regretting, the day we feel we have done enough, we will be finished. The next two-and-a-half years are going to be dedicated to giving a big boost to economic activity, industrial activity, growth to manufacturing, and creating new jobs in the economy. We are going to try and convert India into a digital world so that we can look at a cashless economy.
On dealing with criticism
Constructive criticism is something that I value, my Prime Minister values, our government values. If we commit a mistake, we will apologise. We will also come before the people and accept their verdict. But if a journalist tries to coach people into saying wrong things or play in loop a single criticism of demonitisation whilst ignoring the vast majority who is in favour of it, we will surely protest. If the Opposition criticises this move calling it shock therapy and demands people be given seven days to change their black money into white, certainly we are going to ask them ki aap bhrashtachar, kale dhan aur atankvaad ke saath khare ho ya jo saaf karne ki yojna hai, uske saath (do you support corruption, black money and terrorism or this movement to clean this up)?