birendra.trivedi
Birendra Trivedi
In a swiftly globalising world, ministers in charge of a country’s commerce and industry need to be dynamic in ideas and action to handle their crucial charge. Kamal Nath, India’s point man in this regard, has a complex responsibility. And one that this veteran of nine Lok Sabha contests was always considered well suited to handle. “A whole paradigm shift is taking place,” he says of his charge, in a discussion with Shekhar Gupta, Editor-in-Chief of The Indian Express, on NDTV 24X7’s Walk The Talk programme. Excerpts:
I’m in a small factory in a special economic zone in Noida, on the outskirts of Delhi, and my guest today is one of the most visible faces of the UPA cabinet. Kamal Nath, welcome to Walk The Talk. There were times when the commerce ministry was not so high profile; times have changed.
Yes, times have changed and times are changing. There is not (just) one shift, several paradigm shifts are taking place in the country at the same time. That is what is putting India on the radar internationally and that is what is leading to a new-found confidence in India.
And we chose this one because this is now so much your constituency, SEZs, more than Chhindwara.
Not at all. My constituency is Chhindwara, it is Chhindwara which has got me here. I can never forget that.
As an MP. But as a minister, this is your constituency.
What we are looking at today is a young country, where 60% of our population is below 25 years. Unless we are able to create new avenues in jobs generation, unless we are able to be globally competitive in a globalising world, where will India stand? So, SEZs are one of the major engines of economic growth, as demonstrated everywhere.
Yes, this is a tiny one as compared to what is being planned, and this has exports worth more than a billion dollars.
Absolutely. And we must remember, exports are incremental to what is absorbed in the Indian economy. The economy absorbs this much, and when we are exporting, that is the incrementality, and that is what creates the jobs. We’ve done studies to find out how many jobs are created by exports and today, in the 16 functional SEZs, we are exporting Rs 22,000 crore. We are employing 1.23 lakh people, of which 35-40% are women. Right here in this factory, 40% are women.
We need to ensure in India that manufacturing goes up. Why did China succeed? In Malaysia, 28% of their GDP is (from) manufacturing. In India? 17%. We need to take manufacturing from 17 to 25%.
And move people away from agriculture?
Well, in the end, one job in manufacturing creates three jobs in services. Now in this factory, you’ll see people who’ll be driving trucks, who’ll be doing all kinds of other things, who may have been in agriculture. Because agriculture today, with about 650 million people contributing 23% of the GDP, is not viable. And with land-holding patterns in India being one hectare, largely, we have to ensure that manufacturing is the job-creating sector.
If it is so elementary, why did this idea (SEZs) run into so much opposition, even within your own party, even among your party colleagues in the Cabinet?
Well, there is a view that there is a tax foregone and I think that this is imaginary. What happens in an SEZ? This is for exports; they were paying excise and customs duty for the imports and then getting a refund. Now they don’t pay it and don’t get a refund. So, if you say that I have not been paid, without saying that I had to refund it, it’s not correct. I think the arithmetic is wrong somewhere, we need to correct it. It will be corrected, people will understand this. We can presume anything and everything, it depends what the presumption is.
I am reminded of a joke. A man comes home, very tired, and he tells his wife, today I’ve saved five rupees. She asks how? He says, I was late for the bus, so I walked home. She says, why didn’t you run after the taxi, you’d have saved 30 rupees!
That’s a new spin on being penny wise, pound foolish.
What I want to say is, we need to look at facts in the proper perspective. What is employment-generating? What creates manufacturing? Just wishing it, or creating a law that we’ll have manufacturing, will not (make it) happen.
:SugarwareZ-191: But given the way your government keeps enacting virtuous laws, you might as well enact a law to create more manufacturing, and a law to ban floods, and one to ban droughts.
That’s exactly what I’m saying. I believe we have to attract investment in manufacturing. If we can take away just 10% of the manufacturing activity of China, it would create employment opportunities worth crores of rupees. But creating employment also costs money. So, if you were to look at an SEZ, the question to ask is, what’s the controversy? Should we have manufacturing? If yes, what is the best way to attract it? Do we want industrialisation? What is the best way to attract it? Where do we have manufacturing? It can’t be in the sea, it has to be on the land. That land has to come from somewhere. In any case, the state governments have to see to this. What can the central government do when somebody has the land? And I believe there is no better means of generating employment, of creating economic activity, than the SEZs, which are targetted for exports.
Export-oriented manufacturing..
Because who will come to an SEZ? Only someone who wants to export. And saying that there is diversion of investment taking place..this is a bogey. Someone will only come to an SEZ when he wants to export. If it’s for the domestic market, he’ll go outside the SEZ. And that is amply demonstrated by the existing SEZs.
But you know, it’s not just the finance ministry or your cabinet colleagues or sections of the Left who are sceptical. Even the RBI has now expressed concerns about this.
No they haven’t. The RBI has, in fact, said that this is an engine of growth. In 10 or 20 lines it has said that this is a good policy. In the last two lines they’ve said, ‘But this may lead to disproportionate investment in the states because some states are not attracting investment.’
That’s already happening.. Gujarat is getting investment, Karnataka is getting investment.
That’s already happening. But the RBI has applauded this scheme.
So, you have no concerns about what they have said, revenue loss..?
This is an Act passed by the Cabinet, passed by Parliament. It’s not my scheme..
I don’t think you’re going to deny yourself the credit for pushing this forward.
Of course, I pushed it forward, because I believed in it. Before we had the Act, I put it on the net for eight months, I received inputs. There were points of view, as there should be. The question is, should exports be taxed? Exports are never taxed. Now should you first pay them and then get a refund or not pay them and not get a refund?
So, what you’re saying is, you’re taking away a transaction from the system. But you’re also disempowering people who carry out their transactions both ways, isn’t it? A whole bureaucracy.
That may be so. As I said, a whole paradigm shift is taking place.
You can win an intellectual argument in the political system, it’s much tougher to win it in the bureaucratic system.
Well, I don’t think there’s so much of criticism in this. There are people who’ve criticised..I think they need to go and see the SEZs, understand the ground situation.
What do we see one year from now?
I see that in the next one and a half years, we’ll create employment for five lakh people. And in about four years, by 2010, we’d have created 15 lakh new jobs.
You’re a politician who’s always come to the Lok Sabha, always contested elections, mostly won. You know politicians only do things that translate into votes. Into money in the short run, but into votes in the long run. Do you see this translating into votes for politicians?
Of course. The success of any political party today depends on the trust you can get from the younger generation in this country. And when the younger generation sees that our party is creating opportunities for them, opportunities for a better future, a better life, they will believe that the policies of the Congress party are right. And that is what, in the end, holds the party in good stead.
So this, for you, is won at the Centre. It’s now in the states, it’s up to them to provide land, attract investment.
People already have the land. There is land which is not fit for agriculture. People should go there. Why will someone go to an SEZ? A developer will go, to build the roads, to build the infrastructure, you need to have a green area, you need to have hospitals, if it’s far from the city you need to have hotels. It is that infrastructure which is enabling..
That’s the other criticism. That these are all glorified townships and real estate projects.
Well, if there’s a factory, there’s a certain percentage prescribed by town planning laws, that you have to have so much of a processing area. Now, if you’re going to have 1,000 acres of an SEZ, you have to have roads, you have to have a green belt. It’s prescribed that so much percentage is for factories, it’s called the processing area and so much for facilities. You may need to have a hospital there, you may need to have a club, a recreation area. But that’s not tax-free.
I would ideally like the whole country to be an SEZ, so would you, but that’s not possible. So, something’s better than nothing. Having said that, just explain for dummies: 75 SEZs, 150 SEZs, no limits now but further decisions after 75...What have you people in the government been doing? It’s very confusing.
You’re saying the whole country should be an SEZ. At various stages, somebody comes and gets an in-principle approval. That means before he gets the land, he makes sure that his project is worthy of being considered an SEZ. That’s an in-principle approval; he may not come back, he may not find the land, he may not find the investment. Then there is formal approval. Then there is a notification, when the SEZ is notified. Till now, 21 SEZs have been notified. In this, one view was, this is a new Act, we don’t know how it will work. So, let’s review this after we’ve given both in-principle and formal approvals for 150. But what are we going to review? Nothing’s started functioning. That’s why we said, Let’s go ahead.
Go back to when Sanjay Gandhi brought you into politics. You were part of his goonda brigade, as it was called.
I beg your pardon. Goonda brigade..That’s putting it very harshly. We were part of the Youth Congress.
You were part of his dirty dozen..
There was no dirty dozen. We were the Youth Congress, we had a very deliberate, focussed programme. It was the five-point programme of the Youth Congress, which is now an international programme. Each one plant one, each one teach one. This Noida was created by Sanjay Gandhi. You remember it, I remember it. I used to drive here with Sanjay Gandhi when there was not a tree here.
I don’t think your party wants to remember Sanjay Gandhi that much. I’m asking something else. That was the peak of India’s socialist phase. The word ‘socialist’ was inserted into our Constitution during the Emergency. Did you see yourself becoming a free-marketeer then or did you always believe in the free market? Because that was the era of heavy nationalisation, much heavier than anything in Nehru’s time. Explain to me your change of heart.
There’s not been a change of heart. Clearly, times change. We needed something in the 50s and 60s to consolidate, so this liberalisation was a natural flow from that.
But what we did in the 70s, we nationalised money, we nationalised this country’s wealth and wealth creation.
Yes, at that time we were looking at the need of the hour. We were looking at distributing justice, we were looking at justice in terms of assets and resources. That was the need of that hour.
But there were mistakes made.
Of course, everyone is very smart in hindsight, in retrospect. Okay, we may have started this a bit earlier and I’m sure if Rajiv Gandhi had remained Prime Minister after 1989, if he hadn’t been assassinated...
In fact, that’s what Arun Singh said on this show. He said if Rajiv had come back in 1991, we would have seen the kind of reform and liberalisation that nobody (else) could have carried out.
The whole world started changing. It’s not just India. We saw this in Central and South America, we saw this in Asia, in all parts. In India, okay, we were maybe five, seven, ten years late. But this was a pattern that started developing as the world started changing.
Do you remember chatting about this with Mrs Gandhi or Rajiv, that things are changing, maybe our formulae have to change? When did Mrs Gandhi begin to see this?
I think when Mrs Gandhi came back to power in January 1980, she started to see changes taking place. She started thinking that we have to create jobs, not just the government, the private sector has to be enabled to create jobs. Then Rajiv Gandhi came in, he started this complete process of change. He’s the man who had the vision of IT — you remember, people used to call him Mr Computer— and when he started the computerisation of the railways people said, what’s going to happen? We’re all going to lose jobs. When he started getting computers into the banks, they went on strike, saying people would lose jobs. But that never happened.
Now you have Lalu Yadav, a Lohiaite, reforming the railways.
Well, as I said, times change and if, with changing times, you don’t change, you’re thrown by the wayside. And that is what’s being witnessed by everyone.
Do you see some of that in your Cabinet? People who aren’t willing to change? Or some thoughts that aren’t willing to change?
In a Cabinet it’s important that you have all shades, and that’s its strength. All shades and all opinions come into the melting pot, into this crucible of decision-making.
Within your ministry? We came to know of this note Mrs (Sonia) Gandhi wrote on FTAs...
Mrs Gandhi drew my attention to the fact that this was going to hurt Indian industry and the Prime Minister replied to it. She wrote to me..
Do you think her concerns were misplaced and you were able to allay these?
I thought her concerns were right and those concerns we are in the process of addressing. She was highlighting the concern that we shouldn’t enter into trade agreements which tend to dislocate people, especially in the agricultural sector. And that has been the whole stand (at) the WTO.
And among your allies? There is a lot of scepticism.
I don’t see it that way, because no agreement is entered into without the approval of the Cabinet.
The Left, in particular.
Well, take SEZs. I’ve got a letter today from the West Bengal chief minister saying I want the SEZs, I’ve got letters from several chief ministers. Today, I had a letter from the UP chief minister, Mr Mulayam Singh, saying there should be no caps, SEZs is the right thing. I got a letter from Mr Karunanidhi, one from Mr Naveen Patnaik, he talked to me three hours ago...
Isn’t that the interesting thing in India now? The balance of power has now shifted to the chief ministers. When they want something, it happens.
The best thing that’s happening in this country is the competitive environment between states. States are competing for investment, states are competing for manufacturing facilities. States are looking for setting up industry. Because states can’t create jobs, and if you don’t create jobs you’re going to be thrown out.
Do you sometimes get the feeling that non-Congress states are competing better?
Tamil Nadu’s doing a good job, Gujarat is doing well on the industrial, investment front. Whatever one’s view is of the leadership politically, the fact is that investment is going there.
You’re the second senior member of the Cabinet to acknowledge this in public, that whatever Modi’s politics vis-a-vis minorities, he’s running a fairly competitive state.
Well, he does do certain things that are conducive to growth. Whether he does them by design or default, I don’t know.
What’s next on your agenda? We all know of the battle you are having within the Cabinet over education, foreign universities and FDI in education.
Well, we need to have good education, and for this the state must play an enabling role. Why is it that good universities, why is it that Harvard and MIT don’t come here? Why is it that a university that’s not recognised in its own country has its board up in Noida? Because there’s something wrong with our regulatory framework. We need to correct that.
Our university system is bursting, let’s recognise that. There are more and more people looking for education. There are more and more people getting out of rural India, they are looking for the New India. The electronic media has made them see the world and have aspirations as never before. So they are yearning for that.
And how do you fulfill those aspirations?
Well, by our government being able to recognise those aspirations and playing an enabling and facilitating role.
So is that your next mission, after SEZs?
That’s not part of my job.
But it’s part of WTO.
But within the Cabinet, I would like to see that India is a country that provides first-class education. Let educational institutions come, let Indian professors also (join in). Today, Indian professors are all over the world. I go anywhere in the world and I meet eminent professors. We have the largest intellectual abilities. Why are they outside India? We must make it attractive for them to come back to India.
At what status is that internal activity now? At what state do we see some activity on this?
I think that’s a big priority because, as I said, we are a young country. The fact is, the government is thinking about it, where governments never thought about it. We are thinking of the future. The difference between us and the earlier government is that they thought of the past.
So now you’ve begun to think about it, when do we see some action on education?
I think over the next one year.
So, around the time the first 50 notifications have been issued for SEZs, we will see some action on FDI in higher education?
I think so. What’s important is how we engage with everyone else. As India engages with the global economy, the world is discovering that when India engages with you, they have something to get but India has even more to get.
I think that’s a decent enough target to set, all the best to you. But I think it will be challenging to get the HRD minister on the same page as you. Your finance minister is a convert, but elsewhere you might have a bigger challenge.
We’ll face all these challenges.
I’m in a small factory in a special economic zone in Noida, on the outskirts of Delhi, and my guest today is one of the most visible faces of the UPA cabinet. Kamal Nath, welcome to Walk The Talk. There were times when the commerce ministry was not so high profile; times have changed.
Yes, times have changed and times are changing. There is not (just) one shift, several paradigm shifts are taking place in the country at the same time. That is what is putting India on the radar internationally and that is what is leading to a new-found confidence in India.
And we chose this one because this is now so much your constituency, SEZs, more than Chhindwara.
Not at all. My constituency is Chhindwara, it is Chhindwara which has got me here. I can never forget that.
As an MP. But as a minister, this is your constituency.
What we are looking at today is a young country, where 60% of our population is below 25 years. Unless we are able to create new avenues in jobs generation, unless we are able to be globally competitive in a globalising world, where will India stand? So, SEZs are one of the major engines of economic growth, as demonstrated everywhere.
Yes, this is a tiny one as compared to what is being planned, and this has exports worth more than a billion dollars.
Absolutely. And we must remember, exports are incremental to what is absorbed in the Indian economy. The economy absorbs this much, and when we are exporting, that is the incrementality, and that is what creates the jobs. We’ve done studies to find out how many jobs are created by exports and today, in the 16 functional SEZs, we are exporting Rs 22,000 crore. We are employing 1.23 lakh people, of which 35-40% are women. Right here in this factory, 40% are women.
We need to ensure in India that manufacturing goes up. Why did China succeed? In Malaysia, 28% of their GDP is (from) manufacturing. In India? 17%. We need to take manufacturing from 17 to 25%.
And move people away from agriculture?
Well, in the end, one job in manufacturing creates three jobs in services. Now in this factory, you’ll see people who’ll be driving trucks, who’ll be doing all kinds of other things, who may have been in agriculture. Because agriculture today, with about 650 million people contributing 23% of the GDP, is not viable. And with land-holding patterns in India being one hectare, largely, we have to ensure that manufacturing is the job-creating sector.
If it is so elementary, why did this idea (SEZs) run into so much opposition, even within your own party, even among your party colleagues in the Cabinet?
Well, there is a view that there is a tax foregone and I think that this is imaginary. What happens in an SEZ? This is for exports; they were paying excise and customs duty for the imports and then getting a refund. Now they don’t pay it and don’t get a refund. So, if you say that I have not been paid, without saying that I had to refund it, it’s not correct. I think the arithmetic is wrong somewhere, we need to correct it. It will be corrected, people will understand this. We can presume anything and everything, it depends what the presumption is.
I am reminded of a joke. A man comes home, very tired, and he tells his wife, today I’ve saved five rupees. She asks how? He says, I was late for the bus, so I walked home. She says, why didn’t you run after the taxi, you’d have saved 30 rupees!
That’s a new spin on being penny wise, pound foolish.
What I want to say is, we need to look at facts in the proper perspective. What is employment-generating? What creates manufacturing? Just wishing it, or creating a law that we’ll have manufacturing, will not (make it) happen.
:SugarwareZ-191: But given the way your government keeps enacting virtuous laws, you might as well enact a law to create more manufacturing, and a law to ban floods, and one to ban droughts.
That’s exactly what I’m saying. I believe we have to attract investment in manufacturing. If we can take away just 10% of the manufacturing activity of China, it would create employment opportunities worth crores of rupees. But creating employment also costs money. So, if you were to look at an SEZ, the question to ask is, what’s the controversy? Should we have manufacturing? If yes, what is the best way to attract it? Do we want industrialisation? What is the best way to attract it? Where do we have manufacturing? It can’t be in the sea, it has to be on the land. That land has to come from somewhere. In any case, the state governments have to see to this. What can the central government do when somebody has the land? And I believe there is no better means of generating employment, of creating economic activity, than the SEZs, which are targetted for exports.
Export-oriented manufacturing..
Because who will come to an SEZ? Only someone who wants to export. And saying that there is diversion of investment taking place..this is a bogey. Someone will only come to an SEZ when he wants to export. If it’s for the domestic market, he’ll go outside the SEZ. And that is amply demonstrated by the existing SEZs.
But you know, it’s not just the finance ministry or your cabinet colleagues or sections of the Left who are sceptical. Even the RBI has now expressed concerns about this.
No they haven’t. The RBI has, in fact, said that this is an engine of growth. In 10 or 20 lines it has said that this is a good policy. In the last two lines they’ve said, ‘But this may lead to disproportionate investment in the states because some states are not attracting investment.’
That’s already happening.. Gujarat is getting investment, Karnataka is getting investment.
That’s already happening. But the RBI has applauded this scheme.
So, you have no concerns about what they have said, revenue loss..?
This is an Act passed by the Cabinet, passed by Parliament. It’s not my scheme..
I don’t think you’re going to deny yourself the credit for pushing this forward.
Of course, I pushed it forward, because I believed in it. Before we had the Act, I put it on the net for eight months, I received inputs. There were points of view, as there should be. The question is, should exports be taxed? Exports are never taxed. Now should you first pay them and then get a refund or not pay them and not get a refund?
So, what you’re saying is, you’re taking away a transaction from the system. But you’re also disempowering people who carry out their transactions both ways, isn’t it? A whole bureaucracy.
That may be so. As I said, a whole paradigm shift is taking place.
You can win an intellectual argument in the political system, it’s much tougher to win it in the bureaucratic system.
Well, I don’t think there’s so much of criticism in this. There are people who’ve criticised..I think they need to go and see the SEZs, understand the ground situation.
What do we see one year from now?
I see that in the next one and a half years, we’ll create employment for five lakh people. And in about four years, by 2010, we’d have created 15 lakh new jobs.
You’re a politician who’s always come to the Lok Sabha, always contested elections, mostly won. You know politicians only do things that translate into votes. Into money in the short run, but into votes in the long run. Do you see this translating into votes for politicians?
Of course. The success of any political party today depends on the trust you can get from the younger generation in this country. And when the younger generation sees that our party is creating opportunities for them, opportunities for a better future, a better life, they will believe that the policies of the Congress party are right. And that is what, in the end, holds the party in good stead.
So this, for you, is won at the Centre. It’s now in the states, it’s up to them to provide land, attract investment.
People already have the land. There is land which is not fit for agriculture. People should go there. Why will someone go to an SEZ? A developer will go, to build the roads, to build the infrastructure, you need to have a green area, you need to have hospitals, if it’s far from the city you need to have hotels. It is that infrastructure which is enabling..
That’s the other criticism. That these are all glorified townships and real estate projects.
Well, if there’s a factory, there’s a certain percentage prescribed by town planning laws, that you have to have so much of a processing area. Now, if you’re going to have 1,000 acres of an SEZ, you have to have roads, you have to have a green belt. It’s prescribed that so much percentage is for factories, it’s called the processing area and so much for facilities. You may need to have a hospital there, you may need to have a club, a recreation area. But that’s not tax-free.
I would ideally like the whole country to be an SEZ, so would you, but that’s not possible. So, something’s better than nothing. Having said that, just explain for dummies: 75 SEZs, 150 SEZs, no limits now but further decisions after 75...What have you people in the government been doing? It’s very confusing.
You’re saying the whole country should be an SEZ. At various stages, somebody comes and gets an in-principle approval. That means before he gets the land, he makes sure that his project is worthy of being considered an SEZ. That’s an in-principle approval; he may not come back, he may not find the land, he may not find the investment. Then there is formal approval. Then there is a notification, when the SEZ is notified. Till now, 21 SEZs have been notified. In this, one view was, this is a new Act, we don’t know how it will work. So, let’s review this after we’ve given both in-principle and formal approvals for 150. But what are we going to review? Nothing’s started functioning. That’s why we said, Let’s go ahead.
Go back to when Sanjay Gandhi brought you into politics. You were part of his goonda brigade, as it was called.
I beg your pardon. Goonda brigade..That’s putting it very harshly. We were part of the Youth Congress.
You were part of his dirty dozen..
There was no dirty dozen. We were the Youth Congress, we had a very deliberate, focussed programme. It was the five-point programme of the Youth Congress, which is now an international programme. Each one plant one, each one teach one. This Noida was created by Sanjay Gandhi. You remember it, I remember it. I used to drive here with Sanjay Gandhi when there was not a tree here.
I don’t think your party wants to remember Sanjay Gandhi that much. I’m asking something else. That was the peak of India’s socialist phase. The word ‘socialist’ was inserted into our Constitution during the Emergency. Did you see yourself becoming a free-marketeer then or did you always believe in the free market? Because that was the era of heavy nationalisation, much heavier than anything in Nehru’s time. Explain to me your change of heart.
There’s not been a change of heart. Clearly, times change. We needed something in the 50s and 60s to consolidate, so this liberalisation was a natural flow from that.
But what we did in the 70s, we nationalised money, we nationalised this country’s wealth and wealth creation.
Yes, at that time we were looking at the need of the hour. We were looking at distributing justice, we were looking at justice in terms of assets and resources. That was the need of that hour.
But there were mistakes made.
Of course, everyone is very smart in hindsight, in retrospect. Okay, we may have started this a bit earlier and I’m sure if Rajiv Gandhi had remained Prime Minister after 1989, if he hadn’t been assassinated...
In fact, that’s what Arun Singh said on this show. He said if Rajiv had come back in 1991, we would have seen the kind of reform and liberalisation that nobody (else) could have carried out.
The whole world started changing. It’s not just India. We saw this in Central and South America, we saw this in Asia, in all parts. In India, okay, we were maybe five, seven, ten years late. But this was a pattern that started developing as the world started changing.
Do you remember chatting about this with Mrs Gandhi or Rajiv, that things are changing, maybe our formulae have to change? When did Mrs Gandhi begin to see this?
I think when Mrs Gandhi came back to power in January 1980, she started to see changes taking place. She started thinking that we have to create jobs, not just the government, the private sector has to be enabled to create jobs. Then Rajiv Gandhi came in, he started this complete process of change. He’s the man who had the vision of IT — you remember, people used to call him Mr Computer— and when he started the computerisation of the railways people said, what’s going to happen? We’re all going to lose jobs. When he started getting computers into the banks, they went on strike, saying people would lose jobs. But that never happened.
Now you have Lalu Yadav, a Lohiaite, reforming the railways.
Well, as I said, times change and if, with changing times, you don’t change, you’re thrown by the wayside. And that is what’s being witnessed by everyone.
Do you see some of that in your Cabinet? People who aren’t willing to change? Or some thoughts that aren’t willing to change?
In a Cabinet it’s important that you have all shades, and that’s its strength. All shades and all opinions come into the melting pot, into this crucible of decision-making.
Within your ministry? We came to know of this note Mrs (Sonia) Gandhi wrote on FTAs...
Mrs Gandhi drew my attention to the fact that this was going to hurt Indian industry and the Prime Minister replied to it. She wrote to me..
Do you think her concerns were misplaced and you were able to allay these?
I thought her concerns were right and those concerns we are in the process of addressing. She was highlighting the concern that we shouldn’t enter into trade agreements which tend to dislocate people, especially in the agricultural sector. And that has been the whole stand (at) the WTO.
And among your allies? There is a lot of scepticism.
I don’t see it that way, because no agreement is entered into without the approval of the Cabinet.
The Left, in particular.
Well, take SEZs. I’ve got a letter today from the West Bengal chief minister saying I want the SEZs, I’ve got letters from several chief ministers. Today, I had a letter from the UP chief minister, Mr Mulayam Singh, saying there should be no caps, SEZs is the right thing. I got a letter from Mr Karunanidhi, one from Mr Naveen Patnaik, he talked to me three hours ago...
Isn’t that the interesting thing in India now? The balance of power has now shifted to the chief ministers. When they want something, it happens.
The best thing that’s happening in this country is the competitive environment between states. States are competing for investment, states are competing for manufacturing facilities. States are looking for setting up industry. Because states can’t create jobs, and if you don’t create jobs you’re going to be thrown out.
Do you sometimes get the feeling that non-Congress states are competing better?
Tamil Nadu’s doing a good job, Gujarat is doing well on the industrial, investment front. Whatever one’s view is of the leadership politically, the fact is that investment is going there.
You’re the second senior member of the Cabinet to acknowledge this in public, that whatever Modi’s politics vis-a-vis minorities, he’s running a fairly competitive state.
Well, he does do certain things that are conducive to growth. Whether he does them by design or default, I don’t know.
What’s next on your agenda? We all know of the battle you are having within the Cabinet over education, foreign universities and FDI in education.
Well, we need to have good education, and for this the state must play an enabling role. Why is it that good universities, why is it that Harvard and MIT don’t come here? Why is it that a university that’s not recognised in its own country has its board up in Noida? Because there’s something wrong with our regulatory framework. We need to correct that.
Our university system is bursting, let’s recognise that. There are more and more people looking for education. There are more and more people getting out of rural India, they are looking for the New India. The electronic media has made them see the world and have aspirations as never before. So they are yearning for that.
And how do you fulfill those aspirations?
Well, by our government being able to recognise those aspirations and playing an enabling and facilitating role.
So is that your next mission, after SEZs?
That’s not part of my job.
But it’s part of WTO.
But within the Cabinet, I would like to see that India is a country that provides first-class education. Let educational institutions come, let Indian professors also (join in). Today, Indian professors are all over the world. I go anywhere in the world and I meet eminent professors. We have the largest intellectual abilities. Why are they outside India? We must make it attractive for them to come back to India.
At what status is that internal activity now? At what state do we see some activity on this?
I think that’s a big priority because, as I said, we are a young country. The fact is, the government is thinking about it, where governments never thought about it. We are thinking of the future. The difference between us and the earlier government is that they thought of the past.
So now you’ve begun to think about it, when do we see some action on education?
I think over the next one year.
So, around the time the first 50 notifications have been issued for SEZs, we will see some action on FDI in higher education?
I think so. What’s important is how we engage with everyone else. As India engages with the global economy, the world is discovering that when India engages with you, they have something to get but India has even more to get.
I think that’s a decent enough target to set, all the best to you. But I think it will be challenging to get the HRD minister on the same page as you. Your finance minister is a convert, but elsewhere you might have a bigger challenge.
We’ll face all these challenges.