‘There is durable consensus on a more open economy’

Undoubtedly, the 1991 reforms were a decisive turning point in India’s economic history. Not only did the economic growth accelerate, but also growth of Indian entrepreneurship, international trade and foreign investment — all led to the redefinition of India’s role in the world, both in terms of politics and economics.

Since 1991, we have had five Prime Ministers (Modi is the sixth) and each of the PMs has gone on the same track — sometimes at a slower pace, sometimes quickly. But nobody has changed the track. So, to that extent, there is durable consensus that a more open and liberal economy is in India’s interest.

There have been issues. Inequality has increased. The success we have had in the IT industry has not been matched by successes in the delivery of public services — education and the rest. Everything is a mixed bag.

Not everything that happened before 1991 was bad and not everything that has happened after 1991 is good. We have to balance it.

It is a challenge. The country being what we are, society being what we are, public delivery of education and health is essential. Privatisation of education and health will be a disastrous step. But how do you make public systems more efficient — that’s a big challenge. We have made the private sector more efficient and productive by deregulation. But how do we make the public sector perform, particularly in education and health?

Politics always governs economics; politics should govern economics. God forbid we divorce politics from economics. We are an open and democratic political system, and I wouldn’t want to live in a political system that delivers high economic growth but does not deliver on basic human freedom.

That’s a wrong question to ask. We need politics and a stronger and deeper democracy — that to me is far more important. The preservation of democratic freedom is far more important than accelerating the economic growth rate.

I wouldn’t call it political compulsions; I would call it political reality because it is wrong to divorce economic from politics. The political and social systems very much determine the economic choices. Economic choices cannot be purely technocratic in nature.

Farm loan waiver is certainly not a catch-all solution, but certainly an important first step at elevating distress; but there are longer-term measures that are required to be taken. It is not just loan waivers; they are part of the package — irrigation, income security is very important. A lot more to need to be done to strengthen Indian agriculture than merely loan waivers. We have faced problems in in the past, such as agricultural shortages, because of which we have put in place certain systems. But now, we have substantially addressed some, such as the issue of production. So, farm loan waiver must be seen in a larger context.

Inequality has increased — inequality among States, inequality within society. And one of the reasons is because public systems in education and health have not delivered to the extent we expected they would. It is not just public investment and expenditure, but delivery of health and education have also to commensurate with the investment we are putting in. Part of the reason why inequality has increased is because of this. We have to really address how to make the public system more efficient.

We have to keep working on them. We get fixated on big issues. We must remember Arundhati Roy’s book The God of Small Things . We fail to worship the god of small things and worship the god of big things.

You have to get things done. You need to have the right policies and procedures, and the right people to implement and execute them. So there is no magic wand or formula. You have to keep doing it.

Governments come, governments go, you must continue doing what needs to be done. I don’t worry too much about economy; it will take care of itself. I worry more about social issues — caste discrimination, growing intolerance...

Right now, inflation is not a concern. Inflationary expectations have been squeezed out by not giving rural producers their due. Enough people are worrying about the economy.

It is true that political discourse has become more and more abusive and vitiated. It is unfortunate.

COMMENT NOW