Finance Minister P Chidambaram discusses growth targets, Congress attitudes to media and AAP, and Narendra Modi’s politics in this interview to P Vaidyanathan Iyer.
Congress vice president Rahul Gandhi has said the BJP is marketing itself better. Do you think this government is lacking in communication?
I think it is a fair criticism that we have not communicated our achievements to the people. People expect communication from the top. But given the nature and the personality of our leaders at the top, they have been, if I may say, in an understated way, very media-shy.
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Could the prime minister have come more often before the public or you as the finance minister appeared before the media more often to tell people about the government’s policies?
I have appeared before the media more often than any other FM in recent times. On an average, I address the media or a public function once a week. The prime minister addressing the media is different from the finance minister or the home minister or the health minister addressing the media. When the PM addresses the media, he speaks for the whole government. The finance minister or any other minister is limited to his portfolio. It’s only occasionally we can stray and speak about other portfolios of the government, but that is not usually done. If the government’s overall stance and policies and approach have to be articulated and communicated, that can only be done by the head of the government. Let me give an example. [Barack] Obama appears on television at least twice or thrice a week. [David] Cameron appears before the media at least once a week.
India managed the global economic crisis of 2008 very well. It posted good growth numbers in the following two years. Subsequently though, it doesn’t seem so. For example, over FDI in retail, Mamata [Banerjee] snubbed the UPA-II government and eventually pulled out.
I don’t think you can compare the September 2008 crisis with the Trinamool Congress opposing FDI in retail. I think they are chalk and cheese. I can’t speak of the period 2009 to July 2012 because I was not in the finance ministry. But since my return to the ministry, we have acknowledged the difficult situation in which the Indian economy is placed and we have fought our way out of that difficult situation. Can anyone deny that the economy, in the last 17 months, has been stabilised and the exchange rate stabilised? We have added significantly to the foreign exchange reserves and we have shown determination in containing the fiscal deficit and the current account deficit. So in the last 17 months, we have shown the will to fight.
But the twin deficits did affect investor sentiment.
But there are at least 50 countries that have worse deficit ratios. Why doesn’t anybody talk about their downgrade? I maintain there was no justification at any time to talk about or hint at a downgrade for India.
Hasn’t the country lost significant time because of poor decision making, including in the Ministry of Environment and Forests, in the last couple of years?
There was a problem in the Ministry of Environment and Forests. But I think that problem has been fixed now.
The prime minister has said Narendra Modi was a disaster for India. Do you agree with this view?
I think what he meant was a BJP government headed by Shri Narendra Modi will be a very poor choice for the next government. And I agree with him. A BJP government headed by Shri Narendra Modi would most likely combine Luddite economics and majoritarian politics. That will be a disastrous combination for India.
But then the Congress’s support without any conditions to the Aam Admi Party in Delhi has also resulted in a confrontational government. How do you justify that?
That is a decision taken by the local unit of the Congress party in Delhi. I think opinion was divided within the Congress whether the party should offer outside support to the AAP or not. Whether it was a right decision or otherwise, time will say. But let me reiterate, opinion was divided within the party.
Do you think it was a wrong decision?
I think it was an unnecessary decision. No decision was called for. We had eight seats and [were] reduced to third place. We were neither voted to form the government nor voted to be the principal opposition party. So we should have just kept quiet. But that is my view. The view that prevailed was we would extend outside support. That’s the local party’s decision.
Arvind Kejriwal now says the Congress will regret supporting the AAP. He is opening CWG files and those related to corruption charges against ministers and bureaucrats.
Arvind Kejriwal has made hundreds of allegations against hundreds of people. If the Delhi government has material to take action against anyone — politician or civil servant — they should simply take action. Why constantly speak about it. I’ve noticed that Sheila Dikshit, Arvinder Singh have welcomed any action that the Delhi government might take. So why constantly harp on it. If there is material, take action.
In the budget ahead, do you think you will be able to stick to the fiscal deficit target set in the beginning of the year?
I have said the red line drawn for fiscal deficit at 4.8 per cent of the GDP will under no circumstances be breached. The prime minister has fully supported me on that matter. So I can confidently assert three weeks before the budget will be presented that we will not breach the 4.8 per cent target for fiscal deficit set for the current fiscal.
It is just three, four months before the country faces Lok Sabha polls. Given the outcome of assembly polls in five states, there is a perception that Congress has been written off.
I don’t agree with your perception that the Congress has been written off or will be written off. We were more or less in the same position in December 2008 and January 2009. We had the September 2008 global economic crisis, we had the November 2008 attack in Mumbai. December 2008 and January 2009 were pretty gloomy months for the Congress party and the UPA-I. Yet we won the elections in May 2009. I think it is too early to write off any political party. Yes, the situation appears to be difficult. But the challenge before any political party is to overcome a difficult situation. I think it is possible to overcome the difficult situation. What degree of success we will meet, I can’t say.
You have said a large number of seats should be given to the young…
Yes. I will be quite happy to give up my seat in favour of a younger candidate and campaign vigorously for that candidate.
Is Pondicherry a choice?
I have only read about it in a silly newspaper column. Pondicherry has a sitting MP who is a minister. I want to remind you of that.
Is Kanyakumari a choice?
I have not read about that in any silly newspaper column so far.
The UPA government introduced RTI, launched MNREGA and expanded it, and took several other policy measures aimed at benefiting the larger majority. But people want more. Is it putting a constraint on the UPA or on any other political party going forward?
It is, and it will, on any government. One has to make a choice between consumption and investment. Consumption expenditure benefits people in the short run. Investment expenditure benefits people in the long run. While we can’t say government resources will be spent only on supporting investment expenditure, it is important to tell the people that a significant proportion of government expenditure must be for investment. Unfortunately, more people are easily beguiled by promises of more consumption expenditure, including subsidies. But that’s a fact of life. If it is a fact of life, it is also a fact of political life. And political parties have to take note of this fact of political life.
Then, is this the reason behind Rahul Gandhi’s promise of providing 12 subsidised cylinders to people? Isn’t it true that 85 per cent of subscribers require only six cylinders a year?
That’s not correct. The median is 6.5. But the petroleum ministry has told me that 90 per cent of all consumers take nine cylinders or less. But there is that 10 per cent mainly in urban areas, which is extremely vocal, which has access to political parties, and which has led the demand for raising the number from nine to 12. And you saw the support for that in the AICC gathering. That’s the fact of political life. And therefore, the vice president of the party responded by requesting on behalf of the party that the number of cylinders be raised from nine to 12. As I said, it is difficult for a political party – any political party including the Congress – to constantly or stubbornly deny the realities of political life.
It is said you are Rahul Gandhi’s Manmohan Singh, or that you will be the next prime ministerial candidate if the party comes to power.
Why am I Mr Rahul Gandhi’s Manmohan Singh? Mr Rahul Gandhi is the vice president and I am the finance minister. Why elevate me?
It is also said you may be the prime ministerial candidate.
I don’t know how this question rears its head from time to time. The party has made it clear that Shri Rahul Gandhi is the vice president of the party and therefore the number 2 in the party. We made it clear he will lead the campaign in the 2014 elections. And I think it is plain truth that if the Congress party is invited to form the government, the government will be headed by Shri Rahul Gandhi. All this is abundantly clear.
But the party did stay away from naming him PM candidate.
That exercise, or that little ceremony, is of interest only to the media. He is the vice president of the party and number 2. The Congress president has declined to be the prime minister once before. When a party goes into an election under the leadership of the vice president – after the party president has declined to be the PM – is it not plain to everyone? I think it is plain to common people… This ritual of naming him the PM [candidate] — only the media is keen to witness a ceremonial coronation.
Why do you think people are fascinated with the phenomenon of Narendra Modi — is it because of the way he wields control over the party? And is that an issue?
I don’t know. I don’t think so. Every leader of every political party in this country wields a very high degree of authority in the party. Take Jayalalithaa, Mayawati, Mulayam Singh Yadav, Mamata Banerjee, Naveen Patnaik. It is nothing unusual in the case of Shri Narendra Modi and his party. And that is not relevant. What authority a person wields in the party is not quite relevant to the discussion who should be the prime minister or who should head the government. What is relevant is the nature and the character and the personality, the policies of that person. In Shri Narendra Modi, we have someone who, in most matters, takes a majoritarian attitude, and, to make it worse, has a very authoritarian style. A majoritarian policy, and an authoritarian style of government would be a disaster for this country.
Isn’t India mature enough or resilient enough to accept or live through this?
So did the rest of the world think that Germany is mature enough to accept majoritarian policies. So did the rest of the world think in the 1930s. I think one must clearly identify the danger. The danger is the imposition of majoritarian politics led by an authoritarian prime minister.
On investment, has the UPA missed the bus?
If the UPA has missed the bus, 150 countries have missed the bus. Investment has slowed down worldwide.
How much of it is India’s own making?
Partly, it is our own making because we allowed our fiscal deficit limits to be breached. And we allowed inflation to be entrenched at a very high level. But those were unintended consequences. Let me repeat, those were unintended consequences of the stimulus packages that everybody in this country at that time agreed was a right medicine for the crisis that we faced. Other countries have tipped over into bankruptcy. We did not. In some countries, the economies simply collapsed. It did not happen in India. There was a sharp slowdown in our economy, the first casualty being investment. But in the last 17 months, we have taken a number of corrective steps. Clearly, the prospects are India will get into a 6-per-cent-plus growth rate in 2014-15. The latest projections by the World Bank are India will grow 6.2 per cent next year.
There is a view in the public that ‘if Modi is to be blamed for riots, there were several incidents during Congress rule too, including the 1984 riots against Sikhs in Delhi. Gujarat has not witnessed any riots after 2002.’ Isn’t that good enough a justification?
There has not been a riot in Delhi after 1984. That doesn’t mean that what happened in 1984 was not wrong. The Congress party has apologised for what happened in 1984. Rajiv Gandhi was prime minister for less than a day when the riots broke out. Yet the Congress party apologised. Mrs Sonia Gandhi apologised. Dr Manmohan Singh apologised. All that the people are asking is there may have been no riots post 2002, but why don’t you have the humility and grace to apologise for what happened in 2002? He had been the chief minister for several months when the riots happened. And there is evidence that people in the higher echelons of the Gujarat government were either complicit in the riots or were negligent. Nearly 2,000 lives were lost. Don’t you owe an apology? Do the victims’ families deserve the contemptuous remark ‘kutte ka bachcha’? Shouldn’t someone explain why the CM said ‘for every action there is an equal and opposite reaction’? Is it not true that one of the ministers, Mrs [Maya] Kodnani, has been convicted and is serving a jail sentence? So let’s not rationalise what happened in 2002 by referring to subsequent years. We’re focused on 2002 and I think the person who was the head of the government in 2002 owes an apology for what happened in 2002.
So if an apology is given, is it good enough?
It is not good or bad. An apology, a genuine apology, genuine contrition will assuage the feelings of the victims’ families. But now there is no hope that such a genuine apology will be forthcoming from Shri Narendra Modi.