With the Indian economy appearing to pick up pace once again, even as it comes under increasing scrutiny, often under a political-populist lens, Republic World has spoken to Sanjeev Sanyal, the Principal Economic Advisor in the Finance Ministry, who has addressed some of the biggest talking points.
On GDP growth: The latest figures released by the Central Statistics Office said that the Indian economy had grown at the rate of 7.7% in the fourth quarter of FY 2017-18, and at 6.7% for the full year. Speaking about the "strong" numbers, which see India holding on to its moniker of 'world's fastest-growing major economy', Sanyal said that he was very pleased with the economic recovery and opined that the on-ground growth entailed here was being seen, among other places, in the rapid growth being witnessed in India's infrastructure.
Admitting that there had been a temporary slowdown because of various reforms undertaken by the government, Sanyal opined that the country would now begin to see their benefits. He cited growth in private sector investments and hailed the government for being able to keep inflation under control.
"We have not had ever in our economic history since Independence a prolonged period of such well-maintained inflation."
A matter that directly or indirectly touches the lives of just about every citizen of India, however, is fuel prices, which have hit historic highs in recent weeks. On this, Sanyal said that there were no quick fixes as India is dependent on foreign oil prices and the margin to pass down benefit to consumers was slim. He said that the government's decision to link rates directly with global crude prices was a good one but that India would have to invest in other forms of energy to get real relief. He declined to give a timeline for petroleum products being brought under the GST's ambit -- something that the Petroleum Minister has spoken about numerous times -- but said that deliberations are ongoing in the matter.
"As long as we remain dependent on imported oil and oil prices go up, we'll have to pass it through to some extent."
"In the end there's only one long-term solution: we have to begin to go into renewables and invest in other forms."
Sanyal also spoke about the issued plaguing India's banking sector, whether they be NPAs or the recent scams that have come to light. He said that the NPA problem wasn't new to the Indian economy and that the current scenario was due to an indiscriminate lending boom between 2008-13. He highlighted recent breakthroughs in tackling some of the biggest defaulters via the Insolvency and Bankruptcy code (IBC) and also spoke of a fundamental clean-up in the culture of credit, specifically, the end of politically-directed lending. He also answered about what the flip-side could be, with banks in danger of becoming risk-averse.
"Now have we swung the pendulum so far to the other side that no lending would happen? Certainly, it is something of concern as we do still want risk-taking and entrepreneurship in this country and MSME's to get credit."
"In the end we need a healthy balance. On one hand, we want credit growth. On the other hand we'll have to take away the old style of politically-directed lending, specifically to a few groups, and eternal evergreening after that."
On scams, while Sanyal said that one could never be sure of whether or not there are more skeletons in the closets of banks, such as the Nirav Modi-PNB scam, the authorities now have a fair idea of what's going on in the sector, saying that the culture of impunity was being squeezed out and the days of blatant flouting of financial guidelines was over.
A matter that has come up a number of times in the last few years and is likely to come up again before the 2019 Lok Sabha polls, is farm-loan waivers. Sanyal said that while state governments were free to waive farm loans, the centre didn't intend to step in such a fashion, and would only do so if an emergent situation arose.
"As an ongoing basis, if that's what state governments wish to use their resources for, so be it. But the central government, we will not remove the fiscal controls"
On tackling corruption, a big pre-poll and post-poll promise of the Narendra Modi-led government, Sanyal said that there was not so much a one-shot silver-bullet solution as there was a bouquet of plans. Even in the informal economy, GST and Demonetisation have led to a big pool of data, he said, adding that "anonymity was no longer a shield versus corruption."
Sanyal, who worked in the private sector before taking up his present role, said that policymakers were continuously getting on-ground feedback on reforms. The ministry didn't have a pigheaded view on how things should be, he clarified, adding that in reforms such as GST, discussions and modifications were continuously being made.
"As policymakers, we don't claim we know everything for all time. We're doing things where there can be unintended consequences. We're continuously tinkering with it and we'll do more. It's not like we have a pigheaded view."
Commenting on the overall state of the Indian economy from a historical perspective, Sanyal referenced some of the topics he's written about in his books. Citing historical accounts of how India and the larger Indic civilisation used to be a lynchpin of the world economy, he highlighted India's erstwhile status as a maritime power being significant. He said that there was a major flaw in history-writing -- specifically that it was written from a 'Delhi perspective'. India's neighbours in the past were not just China and Pakistan, but also countries like Oman and South Africa, Sanyal said. This view was also being reflected in the government's policy-making, he confirmed, providing examples.
While Sanjeev Sanyal has written a number of books that predominantly deal with viewing India's economy under a historical/geographical lens, his latest book is a little different.
Titled "Life Over Two Beers and other stories", the book is described as 'a satirical take on modern India in short stories'. Sanyal says that some of the stories are based on first-hand experiences but others needn't be. He mentions the Delhi cocktail circuit and the Kolkata intellectual clubs being among those whom he has lampooned and also talks about a story called 'Trolls'.
When asked about whether long-form fiction would be the next step, Sanyal instead championed the short-story format, referring to it as an art-form. He mentioned names of classical writers from India and abroad who had written short-fiction but conceded that it is now considered a 'poorer cousin' of long-form fiction.
Would his latest book result in any policy-related 'Eureka' moments? "Maybe we'll start a Ministry of Humour", Sanyal says.
And here's the blurb for his new book, as per Amazon:
An entertaining and surprising ride through an India you thought you knew
Sanjeev Sanyal, bestselling author of Land of the Seven Rivers, returns to enthral readers with a collection of unusual stories. Written with Sanjeev's trademark flair, the stories crackle with irreverence and wit. In 'The Troll', a presumptuous blogger faces his undoing when he sets out to expose an Internet phenomenon. In the title story, a young man loses his job in the financial crisis and tries to reset his life over two beers. In 'The Intellectuals', a foreign researcher spends some memorable hours with Kolkata's ageing intellectuals. From the vicious politics of a Mumbai housing society to the snobberies of Delhi's cocktail circuit, the stories in Life over Two Beers get under the skin of a rapidly changing India-and leave you chuckling.