This slowdown is a stage for real transformation: Aroon Purie
In his welcome speech at the India Today Conclave 2019, Chairman and Editor-in-Chief India Today Group, Aroon Purie, touched upon a range of topics of national importance.
Good morning Ladies and Gentlemen. A very warm welcome to you all. It is great to be back in Mumbai with another edition of the India Today Conclave. This March, we had shifted our national conclave to Delhi as it was going to be a year defined by elections and politics and power equations at the Centre.
But Mumbai has tugged us back. Yours is a city of enterprise and dynamism, of resilience and reinvention -- qualities our country needs across the board. As it turns out, this is also a year dominated by conversations around the economy, so it is doubly apt for us to be hosting this edition of the conclave in the financial capital of the country.
The common theme running through our country and the conclave is transformation. Prime Minister Narendra Modi ran his election campaign on the promise of a New India. At the start of his new term, he also promised to turn India into a 5 trillion-dollar economy over the next 5 years.
Almost immediately after, voices of concern began to emerge across the country. India's GDP is down to 5%. Manufacturing growth has slid to 0.6%. Unemployment is at a 45-year high. MSMEs, which are the backbone of our economy, are badly hit. Sales in the auto sector and the FMCG sector have slumped. Real estate is in the doldrums, lending is sluggish. Consumer and corporate sentiment are low.
And India is reeling under many global headwinds.
You will be hearing a lot about all this in the next two days.
What are the causes? And the course corrections? But the critical point here is: this slowdown is an opportunity for both deep introspection and concrete action.
After me you will be hearing from the RBI governor Mr. Shaktikanta Das who plays critical role in the economy.
The crisis the stage for real transformation. After all, as they say, one should never waste a good crisis. That's when people are more willing to accept change.
I have always believed India is a rich country with poor people. We are rich in natural resources and we are also a nation of very smart, creative, hardworking and ambitious people. Across the world, Indians excel in every field. Given the right environment, we flourish.
How is it then that people with the same education and background wilt in their own country instead of blossoming? We must ask ourselves this question.
We are fortunate to have a young population, whose average age will be 29 by next year, making us the youngest nation on the planet.
What do we need to do to release this great energy which lies sorely underutilised? Energy that creates wealth for the individual and for the nation? What is it in our environment that prevents us from realising our full potential?
My answer is simple. It's our GOVERNMENT and our POLITICAL CLASS. And this does not apply to any particular party or regime. This is a problem that has plagued us for several decades.
Which is not to say I don't believe in our parliamentary democracy. Far from it. I believe that, for all its faults, it is the only way India can be governed. It is the only way; the regional and ethnic aspirations of our diverse country can be accommodated.
However, over the 7 decades since Independence, barring a few periods, we have seen rampant populism, self-serving appeasement, irrational economic policies and just plain bad leadership.
This has resulted in an economy riddled with contradictions and bedevilled by entrenched vested interests. It has also bred a society that is often at war with itself in the name of caste, creed or religion. To change all this is a Herculean task.
In a fortunate confluence of history, we have the right man in the right place. He can fix things if he wants to. He is the supreme leader of the party and his government.
We know that he has the courage to take bold decisions. He is willing to go to places where other politicians fear to venture. Look at what the Swachh Bharat Abhiyan has achieved. India could declare itself Open Defecation Free by the end of this year.
He's a visionary. He's a doer. He's a master communicator. He wants to change India, whether you like it or not. The person I am talking about is none other than Prime Minister Narendra Modi. In my 44 years in journalism, I haven't seen a leader like him.
Let me at this point quote academician Bhanu Pratap Mehta, a person who is no admirer of Mr Modi's but captures the essence of the Modi phenomenon. Please listen carefully. He writes: "Even his staunchest critics have to acknowledge that he has made himself an inescapable figure, someone who has colonised our consciousness so much that even criticism only serves to underscore his importance and reinforce his imaginative hold. His triumph is not what he does; it is that he is the focal point of everything we do."
With this kind of standing, there is no limit to what this prime minister is capable of doing.
I am glad to see that the Prime Minister recognizes that the problem is THE GOVERNMENT.
In his Independence Day speech, he said, And I quote:
"I repeatedly exhort my officials that after so many years of Independence can we not do something about cutting down red tape and reducing the involvement of the government in the daily life of the common man?"
Now he has to walk the talk. Here are my two humble suggestions on how this can be done.
Firstly, any economic policy must be within an ideological framework. Once you commit to a core belief, the rest will fall in place. The policies will also be coherent, not ad hoc.
That core belief, in one word, is the Market.
What do I mean by this? What I mean is, let market forces sort out economic issues. I believe if you want to keep the government out of people's way, you need to believe in the marketplace. Government policies should be framed keeping this in mind.
Let competition, not government fiat, reduces prices. Let consumers decide at what price point they want to buy. The marketplace can be cruel at times, but that's how you get new industries, new products, and innovation. That is how you get a vibrant economy. The consumer is King, not the government.
The government's job is to set standards, prevent malpractices and monopolies. It should do this and step aside. It should encourage competition rather than restrict it. Instead, the government does not trust the markets to do their work. The BJP, in fact, talks Right but walks Left.
Also, the PM made a very significant statement in his Independence Day speech. He said:
"The need of the hour is to recognize and encourage the wealth creators of our nation. They should receive more honors. If wealth is not created, wealth cannot be distributed."
So, wealth should not be a dirty word in India, looked at with suspicion and automatic distrust. Tax terrorism, jail terms for the smallest deviations, super taxes, look out notices without warning the person such measures should have no place in a society that respects entrepreneurship.
If this change in mindset percolates down the government system, it will probably lead to the unleashing of animal spirits that the government so desperately wants to revive.
One eminent banker put it to me this way: if you have a stained torn shirt, you repair the tear, wash and clean the stains, but you don't lose the shirt. The government should remember this while cleaning the system. We should not lose our shirt.
Having said that, I would urge India's rich to introspect as well. We are drowning in stories of corruption, crony capitalism, NPAs and wilful defaulters. With great freedom comes great responsibility.
We cannot argue for a free market if the very idea of the market is distorted by malpractices. I would also urge everyone to remember what is perhaps the most shameful statistic in India: the top 1% of this country owns more than 50% of its wealth.
Such consolidation of wealth is not only obscene, it is also myopic: if prosperity is not passed on, it can only result in a stagnant and unhealthy economy.
We cannot speak of India's demographic dividend but refuse to pay that dividend.
My second suggestion is that if you want to minimize government intervention, you should begin at home, that is, reduce the number of ministries in the central government and in the state governments.
As they say in Hindi, "Na rahega baans, na bajegi bansuri".
We have at the moment 51 ministries, 53 departments and 83 commissions. In comparison, the UK has 21 ministries and the US 15 executive departments. So, you can see how overloaded we are.
Now with reforms replacing the licence raj, most ministries have lost their reason to exist. Several ministries oversee entities that are supposed to be autonomous like SAIL, Air India, Coal India, Doordarshan, ONGC and so on which is really not necessary.
Also, now we have moved to an age of regulators in many industries. But not as much changed because they are mainly headed by former bureaucrats who come with the same mindset. Control not Enable
Over a decade ago, India Today commissioned renowned economist Bibek Debroy on this issue.
He came to the conclusion that we need only 12 ministries - among them, the PMO, Internal Affairs, Rural, Home, Energy, Finance, Social Justice, Commerce and Industry & Environment.
I suspect many of these ministries exist because they are handed over as rewards to loyalists for winning an election. With the Prime Minister's dominance over his party, this compulsion does not really exist for him.
To be fair, this government has made a concerted effort, through technology and close monitoring, to ensure that welfare benefits reach the entitled with minimum pilferage.
However, during the NDA's first term, the number of central government employees increased by half a million. These may be the right people in the right places, but what about the others?
Minimum government should mean less bureaucrats.
Connected to this is the role of public sector undertakings. Prime Minister Modi has often said: "A government has no business being in business."
Sadly, the government is very much in business. The Modi government has dismantled many Nehruvian concepts.
Even the Nehru jacket has been replaced by the Modi kurta.
However, the one they have not only kept alive but also allowed to flourish is what Pandit Nehru called the 'Temples of Modern India'. These are our Public Sector Undertakings. Many of them are now Temples of Doom.
There are 257 operational central PSUs out of which 71 are loss-making. They made annual losses of over 30,000 crore rupees as on March 2018. This amount can provide mid-day meals to over 120 million children for three years.
Worse are the state PSUs. Of the 1,308 state public sector enterprises, only 989 are working and the quantum of losses they incur annually is nearly 1 lakh crore rupees, which is a little more than the total amount India spends on education.
PSU banks are another sordid story. In the last 2 years, the government has recapitalized them to the extent of 2.7 lakh crore rupees. This sum is sufficient to pay the wages of 260 million MNREGA workers for four years.
In any market economy, such losses in PSUs & PSBs should be borne by the shareholders who have invested in them. In our country, it's the taxpayers who bear the cost even though they have no say in these decisions.
Your money and my money is used to pay for the follies of bankers and their cohorts.
It is a colossal waste of the nation's wealth. This money could be better used for providing welfare to the needy and for building world-class infrastructure.
The government at all levels has to get out of the business of running a business.
It must realise that its continued control of businesses will mean the Kiss of Death for them. Frankly, in my humble opinion not much will change in India if the government does not believe in the marketplace and reduce the role of bureaucracy.
The Prime Minister needs to display the same audacity and foresight in his economic decisions as he has in his political ones.
The abrogation of Article 370 which took away the special status of Jammu & Kashmir was one such bold move recently. It has changed the conversation about Kashmir. We now talk about taking over PoK. The Kashmir chapter is closed as far as Pakistan is concerned.
Our neighbour is running from pillar to post trying to get support for its claim, but in vain. This is a triumph for Prime Minister Modi's personalised and agile global diplomacy. He has even got the major Islamic countries supporting India's action.
Domestically, the question is when will normalcy return. The Prime Minister has been almost universally applauded for his decisiveness. But a prolonged lockdown does not sit well with a democracy.
The true test of this decision will lie in how quickly all civil liberties and communication can be restored, and how quickly the government can deliver on its promise to Kashmiris to see a better life through development. I am afraid that is going to be a long tough haul.
You will be hearing Kashmir from Dr. Jitendra Singh - the Minister of State in the Prime Minister's office and ILTIJA Mufti - Daughter of former chief minister Mehbooba Mufti.
There are many other exciting sessions which you will see in the program that will engage, inform and entertain you. They range from immigration to sex robots to cutting edge medicine to the water crisis. And of course, Maharashtra elections. You will be listening tomorrow to the key players including the young Chief Minister of the State Devendra Fadnavis who has been running India's most industrialized state for the last 5 years.
This is a good time then to focus on the most important issue in India: the quality of our political leadership.
The lifeblood of a democracy is robust politics. And I want to say this as strongly as I can -- India is being let down by the quality of its leadership. Across the spectrum, we have leaders who are uninformed, inarticulate and out of touch with people's aspirations.
A large number of MPs in the new Lok Sabha have criminal records. Corruption is rampant. Defections have become as common as a common cold. There is virtually no opposition left in the country. This is when, with a strong government in power, India needs an opposition that is credible, clear, charismatic, vigilant and energetic.
India is a proud argumentative society and political leaders in power and out of power must preserve space for dissent. A strong government - by its very definition -is one who is confident enough to take fact-based criticism.
Democracy is our greatest treasure. We must cherish it, protect it and promote it. And one way to do it is to ensure the freedom of the press. There is no point in shooting the messenger. In today's world the message still remains, and you probably end up shooting yourself in the foot. Surely, there are bad apples in every sphere of life, but you shouldn't condemn the whole tree for that. I plead with you to support an independent media, every which way you can.
A well-informed country makes for a healthy civilised society.
This, then, is the most crucial arena for action, introspection and transformation. A country is only as good as its leaders.
I hope the conversations over the next two days will inspire many new thoughts. And the will to act.
Once again, a very warm welcome to you all. And thank you for coming.