Finance Minister Arun Jaitley addressed the Republic Summit 2018 on the topic 'Silver bullet for the economy', speaking on a range of things his government has done to improve the economics of the country.
In response to questions from RPG Group Chairman Sanjiv Goenka and Republic TV's Editor-in-Chief Arnab Goswami, Jaitley also elaborated at some length about topics as varied as the Rafale deal, the RBI tussle, the Ayodhya issue, the 2019 elections, public discourse and much more.
When being quizzed by Sanjiv Goenka on the changes that have taken place in the last four years, as well as the principal achievements of the present ruling party heading into the 2019 elections, Jaitley said,
"If you compare the situation, where were we on May 26, 2014? The words used for India globally were, we were suffering from policy paralysis. International journalists put us as part of 'Fragile Five'. The fiscal deficit had even touched 6%. Our current account deficit was 4.5%. UPA II, five years combined inflation, people tend to forget was 10.4%. The double-digit inflation was not decades ago, but only 4-5 years ago. Then there was the government governance marred by corruption allegation, credibility. The task was to restore the credibility of the Indian economy. It was a challenging and Herculean task. Once the label sticks to you, it is not easy to change the mindset. Today, people refer to us as the fastest growing economy. Some questioned our major steps, saying we are ahead of the time. At the end of the day, what is the Indian model? It is we need a high growth economy, actually higher than what it is today. At times where there is no global boom, the very high rate is difficult, but to have a reasonably higher rate, formalizing economy, expand your revenue bases without increasing taxes, in fact by lowering taxes. Every year at the budget, I heard, improve the base, don't increase the tax. Whatever came into the pockets of the government went to expenditure, infrastructure and rural India."
After that, Arun Jaitley was asked by Republic TV's editor-in-chief Arnab Goswami on the recent developments in the Rafale controversy, with the Opposition being dealt a huge blow following the Supreme Court dismissing petitions seeking a court monitored-probe into the intergovernmental deal:
"An election can get influenced by several factors. But our primary concern wasn't the date of verdicts. The primary concern is that the country must know the truth and fairness in the system. In Rafale, let's consider why Airforce wanted combat aircraft. It all began with the Kargil war. The enemy was on the mountaintop, and all we had was 155 mm guns firing from the valley. It took several weeks to get people from there. Since then, the proposal came in 2001, NDA approved in 2003. We needed the combat aircraft. An aircraft is normal, it is the weaponry fixed in it which helps fire from long range and fire the enemy, that's the modern warfare. The first presentation made to me by IAF when I was Defence minister was that we need a combat aircraft. In 2003, the government approved. The government changed and tenders came out, people were shortlisted. And eventually out of 2, in 2012, the government came to the conclusion that Rafale is the best at the most competitive price. In 2014, we cleared we needed weaponized aircraft. In 2015, PM went to France and in principle we agreed that we'll buy the aircraft with weaponry, with terms and conditions better than the ones which were earlier. Suddenly then there were campaigns. There were 74 meetings of price and contract negotiation committees. The simple aircraft, agreed in 2016 is 9% cheaper than before, and the weaponized one is 20% cheaper. In the subsequent ones, the price difference will increase. Suddenly, you have a juvenile campaign comparing simple aircraft and weaponized aircraft. Some people buy their own propaganda and believe that the whole world believes it. The court has said every procedure followed. We gave them prices in a sealed cover. When you have detailed judgment, some ambiguity can arrive from somewhere, and you go back to court next day and make the change. If the whole case of Congress based on the ambiguity, then I am satisfied that they have no cases to make. The ambiguity is the detail goes to the CAG and then goes to the PAC. Right now, it is being looked over by CAG. The investigation is not a JPC function. The critics of this transaction chose their forum and they got thrashing of their lifetime. Now they can't go say let me go and shop on some other forum," he said.
Sanjiv Goenka then asked the Finance Minister that given there is a case for consensus or lack of consensus in political decision making between national and regional parties, and if there is any case for consensus in economic policies.
"There is a difference between necessity and reality. Sound policy on one hand, and populism and slogans on other. We've had a whole legacy of slogans. Ultimately in 1991, we moved towards sounder policy. There are some who understand the sound policy, and many who thinks slogans as far as electoral politics is concerned. The case in point is, look what happened in 10 years of UPA. They had the benefits carried on from 1991 to 2004. They had the benefit of a global boom from 2003 to 2008 when the whole world was growing. At the same time, they decided to put advisory committee or council. Instead of increasing productivity, they started redistributing existing resources like Indira Gandhi did in 1971. They thought the world agreed with them, but they didn't. There are many in regional parties with sensible vision. Let us not forget, those who framed our constituion and structure of this country, how did they define India? They defined it as a Union of states. National security prerogative of the Union. Holding the states together, sovereign together, ensuring all areas grow. If you have too much domination of me and my interest, and a dominant role, instead of looking at India, if you look at India moving towards confederation of states, we'll be in serious trouble. Today, what is being propagated as a larger political combination, if one says give us special status, and 10 which are weaker, what do you do. Each one of them will stand up" Arun Jaitley replied.
Arun Jaitley is the present Union Finance & Corporate Affairs Minister in the Government of India. He has held many portfolios in the past, including being the Defence minister. The other panelist, Sanjiv Goenka is the Chairman of RP-Sanjiv Goenka Group. He has been the youngest-ever President of Confederation of Indian Industries and has also previously served as a member of the Prime Minister’s Council on Trade & Industry.
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