The interview given by Dr. Arun Shourie to Karan Thapar (of all people) must have been one of the most widely discussed interviews in India in a long time. I watched the interview fully. About 45 minutes or so. Most people have focused on the negative comments he made but not on many positive things he said about the government, about the PM. Further, he said that all political parties were guilty of being managed by a small coterie and he ridiculed Kapil Sibal’s zero revenue loss estimate. No one discusses that.
In fact, Dr. Arun Shourie had given another interview after this to the ‘Indian Express’ due to the impending visit of the Indian PM to China. That was a gem and there were plenty of useful insights and advice for the PM. Delightful vignettes of Pandit Nehru’s personality after his visit to China:
Let’s talk about the PM’s visit. What do you think he should bear in mind?
First and foremost, he must bear in mind how the Chinese swept Panditji off his feet. They zeroed in on his intense desire to be a world leader. Remember how Chou En-lai — one of the 20th Century’s great masters of diplomacy — dissimulated as an eager student: asking Panditji about Indochina, about world affairs. Soon, Panditji was asking him whether, in addition to what Chou had asked, he would not also like to know about the Arabs, about U Nu, about the difference between the two types of Buddhism… The next day, Panditji wrote to Krishna Menon that he had found Chou to be not well informed about world affairs, but that after their meeting he was better equipped! And how the Chinese completely bowled him over during his visit to China — with uncountable crowds, and the rest. So much so that, after a strenuous day, Panditji was writing a long letter to Edwina Mountbatten: a wave of freedom has swept over China because of my visit, he wrote . . . What a tragedy.
Actually, Pandit Jawaharlal Nehru would have been a better candidate for analysis by the Daedalus Trust. More on that later, perhaps in another post. Let us get back to the ‘famous’ interview.
OpIndia.Com has a post that says that the ‘India Today’ group has spun the interview with mischief. I think they are on a strong wicket. I listened to the segment on the use of the phrase, ‘Trimurti’. Dr. Shourie does not use that word. In fact, he dismisses the use of that word, ‘Trimurti’ by Karan Thapar calling it a big word. But, this is what India Today’s ‘full text’ of the interview does.
Here you go, on ‘Trimurti’:
Q:You mean Mr Modi’s nature.
A: I don’t know. There is a wonderful phrase of David Hume that you and I should also remember that he said Who is it who has not been ruined by his own nature. That is not just Modi, I think, today the government of India and the party (BJP) consists of three persons. That’s all. They are Modi, Jaitley and Amit Shah. These three, they work as a team and you can’t just blame Modi or anybody else but the problem is this ‘trimurti’ is not getting feedback from elsewhere. They have frightened not only their allies but their own party me. [Link]
What ‘India Today’ has done is to put the word, ‘Trimurti’ in Dr. Shourie’s mouth. But, the interview which is still there on the Internet (and accessed at around 4:55 PM Singapore time on 5th May 2015) does not confirm this transcript. Dr. Shourie does not use that word himself. Karan Thapar does and then you see the scrolling ticker liberally using that word, ‘Trimurti’ and attributing it to Dr. Shourie, slyly.
Also, Dr. Shourie reiterates the relevance of David Hume’s quote twice for all persons and not just PM Modi. The transcript omits that reiteration. That omission is crucial because Dr. Shourie’s reiteration was a signal to his audience that he was not singling the PM out. The omission of that reiteration in the transcription is mischievous too.
We should also remember that Dr. Shourie had given an interview to ‘Indian Express’ in December 2014 under the ‘Ideas Exchange’ programme of that newspaper. It is interesting that that interview contains not that many positive references to the Government or to the Prime Minister as this one did. Yet, if I am not mistaken, that interview did not get so much attention as this one. That should tell us something. Notwithstanding the spin of ‘India Today’ (it reflects rather poorly on their journalistic ethics or rather well on the lack of them), this interview had touched many raw nerves. That is a matter for reflection for the BJP, for the government and for the personalities involved.
For me, the disappointing things about the interview were two or three things. One is the comment on the investment cycle. That is not a problem of the present government. It is trying hard to revive it. The blame for it must lie with the corporates themselves, in the aggregate. Their balance sheets are bloated with debt. They overinvested and in the wrong places. The previous government forced banks to lend to its cronies. The UPA government practised myopic socialism and crony capitalism with equal felicity and comfort. Hence, reviving the investment cycle with the private corporate sector is a non-starter until they got rid of their debt. That is what the tough money policy of 1996-98 did. Corporates trimmed their balance sheets in 1999-2001. They were battle ready for 2002 expansion. They have to do it again. I am not sure about his observation that credit growth was only around 3 to 3.5%. The latest figure is around 8 to 9% (y/y growth rate for non-food credit). This is undoubtedly a multi-year low as newspapers are screaming but it is not around 3% to 3.5%.
This government is actually advocating tough love for public sector banks. Initially, I was also struck by the government not capitalising public sector banks and not making adequate provision for it in the budget. I even mentioned it in my comment on the budget for MINT. But, it is such an obvious thing that they could not have missed it. There must be other explanations. I figured that they were trying to wean the public sector banks off government capital quietly. I mentioned it in an interview I did for Bloomberg in India on March 13. My good friend Neelkanth Mishra corroborated my hunch over lunch the next day. In fact, I was pleased to note that he elaborated on it in his comprehensive interview to ‘Business Standard’. Here is the relevant portion:
That said, the government is doing much better than we expected. On banking, the refusal to recapitalize PSU banks shows a strong intent to reform. People question why government entities like Air India get allocations in the budget. But no one questions why PSU banks need to get Rs15-20,000 crore every year. If the banks were performing efficiently, they should have been able to raise capital from the market: for most of them, the government holding limit is not a constraint. This is the first government to be raising the issue of moral hazard of recapitalizing banks that misuse capital. Letting them lose market share improves the efficiency of capital allocation in the economy. We had not expected this to happen, and it has been a welcome surprise. [Link]
The full interview of Neelkanth Mishra is worth going through. It addresses many (not all) issues that Dr. Shourie raises in his interview with Karan Thapar.
Also, on fiscal consolidation, this government might have done the right thing by accepting the UPA government’s impossible budget deficit target of 4.1% for 2014-15. I was critical of the government accepting that target because the ‘true’ budget deficit was around 6% of GDP. This required a massive fiscal consolidation which was anti-growth. I would have liked the government to have issued a white paper on the colossal economic (only economic?) mess that it had inherited from the previous government. Further, the Prime Minister had given rise to extraordinary expectations in his campaign. Therefore, the government going in for fiscal consolidation in its first year in office, I hope that it was a conscious decision and that it did not sleepwalk into it. But, perhaps, by doing so, it had done a good thing by taking economic pain upfront. Perhaps, lady luck would smile on them in the next 3-4 years for some of the hard decisions they had taken. May be, they are doing it without fanfare and, may be, that is deliberate. We need to concede that possibility. That is why I wrote the piece, ‘Slogan Murugan or Action Murugan’ for Manushi. I d oot think that this government has been about all talk and no action. I firmly reject it.
The mess it inherited was huge. Probably, it underestimated it. Alternatively, it might have overestimated its ability to fix the mess in quick time. Indeed, it is quite possible that this government works hard and cleans up the mess in the five years and then some other government reaps the benefits as the UPA government did in 2004. It was the lucky beneficiary of NDA’ economic reforms and the favourable global economic cycle.
Hence, a lot of the economic stupor that we witness in India now is due to the fact that the government was also trying to make good the previous government’s fiscal chicanery, in the face of the private corporate sector’s debt binging and cronyism. Therefore, Dr. Shourie came up short on providing the full perspective on the so-called ‘industrial cycle’.
The second issue for me was his comments on the insecurity of the minorities were most unfortunate and ill-timed, especially with respect to the Op.-Ed that Mr. Julio Ribeiro wrote. It was a badly written piece and that several Christians themselves had taken exception to his piece. Further, subsequent investigations have revealed that some of the so-called Church attacks were due to specific causes and were not part of any systematic targeting on the part of any Hindu group.
Even on ‘Ghar Waapsi’, Dr. Shourie should have corrected Karan Thapar and said that religious re-conversions were par for the course if religious conversions were. In any case, Ghar Waapsi or comments of some of the so-called Hindu leaders that Karan Thapar mentioned, were not part of the government. The comments made by Mr. Giriraj Singh pertaining to the attitude of the Congressmen and women towards Ms. Sonia Gandhi was not a comment on her but on Indians’ attitudes to skin colour. It was a statement of fact. Perhaps, Dr. Shourie was right on ‘love jihad’ and on the risk of the disaffected Muslim youth becoming ISIS recruits.
Third, Dr. Shourie took exception to the Prime Minister’s silence on these matters. Here, I disagree with him. The Prime Minister is right to remain silent and not give importance to the intemperate observations made by some who were barely known to India until a few months ago. Why elevate them from insignificance and irrelevance to importance?
Sadguru Jaggi Vasudev had given an exceptionally brilliant interview to ‘Economic Times’. It was published on March 27. Despite his admonition and advice, the newspaper captioned his interview deliberately wrongly. This is what he had to say on Ghar Waapsi and on the PM’s silence:
What is happening as a reaction to a certain political and cultural and other situations and what is the ethos of the land are two different things. These things are coming up for the first time because for the first time probably…Though when sword was put to our throats we didn’t change, when gun was put to our throats, we were tied us to the cannons, we didn’t change. But now we see that money and other kinds of inducements are taking a population away. People have started reacting because of insecurity, more because this threatens them, because they see a huge percentage of the population has moved on, and once they move on they think like they do not belong to this nation, they act in a different way.
I am not saying somebody cannot be a Christian or a Muslim and be in this country, they must be. I am telling you if there is a remote place in the country that has not heard of Jesus, go give a family there a photo of Jesus and tell them he is a wonderful guy…they will worship him without knowing his name. And whatever Islam is talking about, the formless worship…We have Nirgun, the yogic system is all about that. These things are not new. We have no conflict with them at all. But when it is being used as a political force and you can win an election by being this or that, these things begin. Don’t mistake political manoeuvring for religious process. But we must understand, all religions across the world are only thinking about numbers. So if you don’t think about numbers, you will lose yours, so that is the simple logic they have arrived at and they are trying to do whatever, not very successfully of course. [Link]
On the silence of the Prime Minister:
See from what I heard internally, wherever possible the PM is putting brakes on all these things. But he doesn’t want to comment on that probably… I wouldn’t have commented if I was in that position, because you are giving it still more national stage. The moment the PM comments on these things, the more it becomes a national stage for these jokers.
I think he is refusing to give that stage to them but internally he is taking steps to handle them. But he cannot handle them because he has no authority over them. If 10 people are there it is a party of itself. Most of them don’t have 10 people in their party. Many of these groups are 8-10 people. They just blab and then media cameras zoom in on them for the next three days. I am sure the media is not that unwise, they know who these people are and that they are of no consequence. They are inconsequential and we are raising them in their stature unnecessarily. And we are asking the PM to comment. I am happy the PM has the wisdom to not comment about it because if I were in such a position I wouldn’t do so. [Link]
On the rest of the interview, I have little to disagree with. Some quibbles, yes, I have. For example, the government wants to make India an easier place to do business. That is the big picture theme. Most of the decisions it has taken fit into that framework except for the sudden mindless demands on Foreign Institutional Investors to pay Minimum Alternate Tax. That was a very bad self-goal for a government even as the Prime Minister was exhorting investors in Germany, France and Canada to come to India. Extremely sloppy or malicious or both. I do not know whether the Income-Tax department is the Trojan Horse for the Ministry of Finance or that the Ministry of Finance is the Trojan Horse for the government. I shall leave that question to the government to answer, for itself.
In the final analysis, many are questioning Dr. Shourie’s judgement in giving the interview to an Indian media outlet. Well, what I have done in this blog post is to provide a perspective. This is not an isolated comment on Dr. Shourie’s part. It is part of the continuum of public comments he has been making. If not to the Indian media, should he have spoken to a foreign media outlet? Hardly. As to the spin and distortion of his comments, there are very few English-language media outlets in the country that would have refrained from such behaviour.
I guess Dr. Shourie is old enough to know what he was doing, why he was doing and to accept the consequences. As to whether he has unjustly criticised the government, the answer is: ‘partly yes; largely not’. But, the government should listen because there is much to listen, in that interview and in his interview on China. Pity if the government closes ranks and gangs up on Dr. Shourie and ignore the wisdom in his interview to Karan Thapar and in his remarks on dealing with China to ‘Indian Express’.
On their part, the critics of this government – I am referring to the well-meaning ones – should visualise the counterfactual scenario. Rahul Gandhi’s Congress Party or Janata Parivar with Sitaram Yechury supporting them from the outside? That is the question that Surjit Bhalla posed in his brilliant column on the debate on the farmer’s suicide in Delhi and that is the question that well-meaning critics like Dr. Shourie too should keep in mind.