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India
is Shining though Not Equally
Yashwant
Sinha: We don’t need to beg anyone to come and invest in India
BY
KAVITA CHHIBBER *
You’d
think he would say he fell from the frying pan into the fire, but the
youthful and bright former IAS officer, finance and foreign Minister
Yashwant Sinha said he didn’t regret his foray into politics after 24
years as a bureaucrat one bit.
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Yashwant
Sinha is a current member of Parliament from the BJP (Bharatiya Janata
Party), and was warmly received by an eager group of Atlantans on 13 April
at the Palace restaurant. The event was hosted by GIACC.
Yashwant
Sinha began by saying that even though he is in the opposition party he
can say with great conviction that the India he lived in today is a
vibrant, rising, resurgent India.
There
were many challenges that had raised their heads because of the economic
downturn in the US, and India had its own domestic problems as well with
inflation emerging as the biggest challenge facing the country. As someone
who has seen India changing, it is he said, difficult to pull a large
economy out of the marshy lands, and so the word recession being used for
US after a long time is worrisome. Economics today works on sentiment,
especially the stock markets so the US market has had an impact on the
consumer spending and investment decisions world wide. “So while we have
these domestic challenges, the additional challenge of a possible global
slowdown is there as well.”
However
the former minister said that he is still not despondent because in the
last 6-7 years domestic savings have gone up to 35 percent. “ In 2001
when I was Finance Minister, we used to aspire to reach this 35 percent
savings rate, which was the rate in East Asia, and we were told that
unless domestic savings improved drastically and those resources become
available for investment India will not be able to make a quantum jump.
Today we are no longer China’s poor cousins.”
Mr.
Sinha said that many people say that today India’s economy is on
autopilot and it is because “the government’s capacity to cause damage
to the economy has been considerably limited and unless there is a
catastrophe India will continue on a higher trajectory.” It took 60
years for India to become a trillion dollar economy, but the next
trillion, he said are going to come at a much faster speed. When he would
travel abroad, people would always be talking about China and calling
India’s democracy a drag on the economy stalling India’s progress. “
Today the greatest thing that has happened is that India has achieved a
growth rate comparable to China in a
democratic set up. Democracy is not a drag. It is our real strength.” It
is also the first time that India is going ahead with economic democracy
and entrepreneurial freedom as a result. There are a lot of choices
available for consumers. “For example, Indian airports are beginning to
look like railway stations because they are swarming with people buying
tickets to go places. There
has been a veritable explosion in the civil aviation sector. There are so
many private airlines that have come up, so the public sector too has been
exposed to competition but it has done well despite that competition.”
Talking
from a personal perspective Yashwant Sinha shared the story of the
liberalization of the insurance sector. “It was a major reform that was
carried out when I was finance minister. It was a very difficult battle
that one had to fight in Parliament and outside. There was a general
strike organized by the banking and insurance trade union that shut down
the country in protest against our decision to liberalize the insurance
sector but we still pushed on. Ultimately we won the day and opened up the
insurance sector for the private sector. We allowed a degree of foreign
direct investment. Most important insurance companies of the world today
are operating through private sector partners and the biggest thing is
that the public sector insurance companies are also flourishing alongside.
So the important thing is not so much who owns the enterprise, but how we
manage the enterprise. If the government owned enterprises are given
autonomy to have professional managers come in, those companies will
always do well.”
Indeed
both the public and private sector have come a long way according to
Yashwant Sinha with the demise of the old license permit quota raj days
and what is even more remarkable according to him, is the fact that it’s
a two way street today in India when it comes to investing. “We don’t
go begging the world to come and invest in India. Today they know it is
worth it, and our companies are also investing abroad.” He shared a
couple of anecdotes where on a trip to Germany he was pleasantly surprised
that for the first time an Indian businessman was complaining about German
regulations after buying a company and another time the President of
Germany mentioned to him how an Indian businessman at a dinner event told
him that he only bought German companies to flatter him! There are so many
such stories some involving the blue blooded corporate houses like Tatas.
In
response to a question on the decoupling of the US economy to the
economies of south Asia and how would India try to attract sovereign
wealth lying idle, the former minister said he is not
particularly enamored of the decoupling theory and that anything
that affects the US will have a global impact and India too won’t remain
untouched, though China will be affected more adversely being an export
oriented economy. As far as royal wealth went he said that India has
always been conservative and frowns at allowing any wealth into the
country that is not project oriented and here to stay. “ You can’t
just come and park your money here. It has to be a long term
commitment.”
On a
question about foreign energy policy considering US’s feelings about
Iran, Yashwant Sinha said the foreign policy was very holistic, and that
India as a large consumer of energy had been investing in oilfields abroad
and also pursuing technology to make itself self sufficient. Despite
US’s troubles with Iran, India has always had very cordial relations
with Iran and the Iran-Pakistan gas pipeline was also an effort towards
making India self sufficient. India is looking for pipelines with Qatar,
with Afghanistan and Pakistan and others to build a network of pipelines.
ONGC(Oil and Natural Gas Commission) has set up a separate project to look
for investment opportunities in gas and oil wherever
we can.
When
asked what message would he carry to the youth who think politics is a
dirty game and don’t want to be a part of it, Yashwant Sinha said he had
those very concerns when he decided to leave the Indian administrative
services after 24 years and chose to enter politics. “ And I haven’t
regretted it even once. I give my own example to the young people and say
that if all the good people retreat from politics then we are leaving the
field free for bad people to come. We need good, professional, educated,
right thinking with good ideologies to join the political field. Of course
politics doesn’t give you your bread and butter so you do have to find a
job on the side.”
A
question was asked about the escalating prices of real estate especially
housing and its impact in the future. Yashwant Sinha said the development
that has happened was planned and he can take some credit for the policy
measures which were initiated under his leadership and have been continued
by the present government to encourage the real estate especially the
housing sector in India. “ We have been a bit conservative as far as
foreign direct investment is concerned because we know that is what
brought the East Asian economies to grief. Foreign investors have to have
an intention to stay and not ask for the money and go back as soon as he
sees some clouds on the horizon.” Real estate prices have shot up
because the average age of a person looking to buy a house or an apartment
has dropped from 45 years to 32. Malls are all over the place even in
second and third tier cities not just the metro areas and the demand is
not going to be met in a hurry. Things are slowing down in some areas but
not in the demand of housing.
When
asked about the nuclear agreement, Yashwant Sinha said that as a proud
Indian he firmly believes that India would like to be treated as equals.
“ India has been a declared nuclear weapons state since 1998 and you
can’t put the paste back in the tube-it can’t be undone. We have word
class technology but we are also very responsible and that has to be
acknowledged. There is no reason why India can’t become the sixth member
of that exclusive club and it also involves India getting into the
security council.’
The
final question related to the other side of India which isn’t shining so
well-the darker side where poverty despair, illiteracy and ill health are
major problems. Yashwant Sinha acknowledged that problems existed and it
was important to have an inclusive democracy, but he felt encouraged that
things are getting better. “ So India is shining though it may not shine
equally everywhere and to me it appears that India is unstoppable, India
will go forward, India will globalize and I hope that India and the US
will continue to build a very powerful partnership to mutually benefit to
both the countries and their people.”
* Kavita
Chhibber is an accomplished freelance writer and media
personality. She writes for Dr Deepak Chopra's website www.intentblog.com.
She is well-known for her interviews of celebrities, authors and
public officials. But she also writes hard-hitting news articles and
cover stories for publications.
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