Arun Jaitley interview: ‘These five years have transformed India into an aspirational nation’



I think this government will be remembered for establishing a precedent that India is capable of running a 100 per cent honest government, says Arun Jaitley.?

‘I see these five years as transformational and a turning point in India’s history on more than one count,’ Union Minister Arun Jaitley said. (File)

Union Finance Minister Arun Jaitley speaks to Ravish Tiwari on the achievements of this government, the issues in this election and the bitter political discourse in the poll run-up.


This is the first full majority government after 1989. The last BJP-led government under Atal Bihari Vajpayee had the Pokhran nuclear tests, telecom and electricity reforms, disinvestment and the Golden Quadrilateral to boast about. What do you think this government will be remembered for?


I see these five years as transformational and a turning point in India’s history on more than one count. I think this government will be remembered for establishing a precedent that India is capable of running a 100 per cent honest government. The cynicism that all are the same, this government has smashed that. Two, this government has established a new security doctrine for India, again a turning point… Even if terrorists breach the sanctity of LoC and IB every day, previous governments held a view that we will maintain sanctity… The airstrikes and surgical strikes have established that India will now reach the point of origin, wherever it is, to strike at the root of terror and conduct pre-emptive strikes if need be. Two myths… the world won’t accept that has been shattered, the world supported us. The second nuclear bluff that both India and Pakistan are nuclear powers and therefore won’t take risks also stands demolished. On the security front, India is on the way to become a country possessed not only with aggression but with one of the most powerful deterrents. Our nuclear (power) is our deterrent, our strong armed forces are our deterrents, our capacity at cyber and now at space is also a deterrent. India has become more secure than ever. Third, the cynicism of the past that the Industrial Revolution has bypassed us and that we are destined to be a low-income nation… I think these five years have transformed India into an aspirational nation. For five years, we are the fastest growing major economy in the world. Time is not very far, literally a decade or so away, when we will be in the big three in the world. And then 2030 to 2047, 100 years since Independence, at our growth rates, India will be a country without poverty with world-class infrastructure and a land of opportunities.

This government has used a model which I have always described as one of market reforms with a social consciousness. It will be remembered as a government which lowered taxes and doubled the tax base, collected more and transferred more to the poor than any other government in the past. We have given a dream after Ayushman Bharat and pension for the informal sector.

‘I have one confessional statement to make: the quality of people in political life is still inadequate.’ (Express Photo by Renuka Puri/File)

The Vajpayee government had several handicaps like numerical minority, wobbly coalition and a belligerent and aggressive RSS. Compared to that, you have…

At that time, resources available with the government and the aspirations were also different. You gave me two examples — disinvestment and highways. In six years, the Vajpayee government disinvested Rs 28,000 crore. I do Rs 85,000 crore each year. So, our scale is entirely different. The minister at that time made a song and dance about that minuscule amount, we don’t. Vajpayeeji was a visionary who started the national highways programme. We are actually building 10,000 km a year. So at this rate, India is already the best developer in the world. My own dealings with the RSS and allied organisations have been extremely positive and a pleasant experience. I deal with BMS, BKS, SJM and the Laghu Udyog Bharati… Mazdoor Sangh is extremely happy with us because every section of the labour has benefited…The BMS held public felicitations in my honour twice last year. The Kisan Sangh (is happy) because we provided the village community, predominantly the farmers, with rural infrastructure. Where was this affordability 20 years ago?



You have accused the Congress of shifting to a shrill Left since 2014. Why hasn’t the BJP moved towards the centre as much as it was expected? In fact, Mohan Bhagwat occasionally appears more Centrist than the BJP. He has no hesitation in downplaying Guruji (second RSS chief M S Golwalkar).


There is a famous couplet by Phanishwar Nath ‘Renu’, which he used to recite at the time of the JP movement: Na yeh dakshin, na ye vam, bhookhe ko toh roti se kaam. Why do I accuse the Congress… if you look at the performance between 2004 and 2014 and now with their new agendas, you see a distinct tilt towards ultra-Left and a distinct tilt towards jehadis in the name of human rights. Would Indira and Rajiv have allowed Congressmen to visit JNU when students are chanting Bharat ke tukde tukde honge? On the Pakistan front, 1971 war, Punjab, Kashmir, on national issues, Indiraji took a very clear line. Rajiv also didn’t deviate from that line… I strongly believe that Rahul Gandhi is a product of a dynasty, but is a burden on the dynasty… firstly, because dynasts are usually charismatic, he is not. His quality to shrink the base of the dynasty is more apparent than his capacity to expand the base. Secondly, he has rejected the Congress ideology on multiple counts and, therefore, is predominantly being guided by those who either subscribe to the Left or to separatist ideas… if you see his current manifesto and past utterances, his reactions after Balakot, they are all guided by this philosophy. As against this, the BJP… on the economic front, we will be liberal, we will undertake difficult reforms and will use the enrichment of the state to deplete poverty. Only a state with resources can deplete poverty… Is destroying a terror camp a Right-wing exercise? Is fighting terror a Right-wing exercise? These are the labels created by the media. You can have the same government which fights for India’s sovereignty, which is strong on nationalism and which brings the maximum number of schemes for the poor. So, this Left versus Right has become irrelevant. The issues have to be dealt on merits of what the country needs

Even though many organisations carried out a fake campaign against us regarding institutions, let me deal with four cases because they have come in The Indian Express as well. Follow more election news here.

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Let’s be clear. During the elections, the focus is always on the leader. When dominant personalities are there, the elections get dominated by them. (Express photo by Renuka Puri/File)


I am going to ask this question.


Let me answer this. The Supreme Court: The only area of difference that we have had is that we are constitutionally entitled to send a name back once for reconsideration. We did that and a hue and cry started that we are against the Supreme Court. Except that, there is no incidence… We have had no confrontations. As against this, you have a manifesto that says that a National Judicial Commission will comprise Members of Parliament. MPs will appoint judges? MPs will hear complaints against judges? And a shameless section of the media has the audacity to censor all this. When did we have differences with the Election Commission? They attack the Election Commission every day with choicest of adjectives, but we are against the EC?… Come to the third, the CBI episode… it was a cleansing exercise in view of what was happening at the top level. The CVC went into it and gave a recommendation. Ultimately, the high-powered committee also went into it. Our stand was vindicated. Even a cub reporter or a semi-informed reporter would have known as to what was happening. A cleansing exercise is an attack on the institution? Let us come to the last one. I challenge anyone for a public debate. We never interfered in the RBI, we always respected. Now that the political colours of Dr Raghuram Rajan are out, we even allowed him to complete his full term. He was making politically loaded statements during his tenure, we tolerated that, we allowed him to complete. Even in the subsequent Governor, our difference as the stakeholder in the economy — we are the most major stakeholder in the economy — is that the RBI’s autonomy can’t be used to squeeze the market of liquidity and credit. That will be destructive for the Indian economy. How is that an attack on an institution? Elected governments are accountable, central banks are not…. in fact, there was not a single stakeholder in the economy, including the market players, who disagreed with our stand. Only the compulsive contrarians did.



Why I am asking this question of shifting to the centre and invoking Mohan Bhagwat on Guruji is that there was a remark by a Union minister asking Shahrukh Khan to go to Pakistan, the Governor of Tripura, a constitutional functionary, is making hateful remarks, but no one from the higher-ups, like you, publicly snub them to instil public confidence


I have one confessional statement to make on this: My confessional statement is this: the quality of people in political life is still inadequate. And therefore, you will find people who are speaking out of turn, which is not the party stand. Really in search of their own identity. And because these oddball reactions find a greater space in the media, these mavericks are encouraged to do so. And I regret the fact that we have a large number of them in the BJP.


Won’t a public reprimand from higher-ups help?


It happens at times. But when the party decides for the future, they factor this in.


You have been in Parliament for a long time. But we have never seen such a breakdown between the treasury and opposition benches. What has led to this?


Only one factor, there is one family in this country which feels that they have a right to rule and they will not accept anybody out of their influence to rule. I find Opposition leaders, at 10.30 every morning during Parliament session, literally embarrassed with a feeling of exasperation.


But you cannot possibly be blaming one family and 55 years of their rule for everything.


According to me… haven’t you seen Mrs Sonia Gandhi tearing paper and handing it over to her MPs to make aeroplanes to be thrown at me when I was speaking during the Rafale debate? I have never seen a leader of this seniority do this. When I was speaking, I saw Rahul Gandhi getting selfies clicked with MPs inside Parliament chamber. There have been several governments in the past, but official work is always done. You cannot have session after session be wasted.

You did it.

There was one session — only on 2G — which then led to the appointment of the JPC. Between a session in five years and sessions two years in a row, there is a world of difference.
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‘Even when you criticise, the subtlety of criticism is more important, the satire is more important, the language must be of a particular standardised form…’


On the field, BJP supporters cite Modi, Modi, Modi. Now we have a Modi channel. In PM’s speeches, we do not ever hear of any senior colleagues of his party, it is only about him. This may win you an election, but you are creating a personality cult with no next generation of leadership being introduced… In the Vajpayee-Advani era, people knew about the next generation leaders.

Let’s be clear. During the elections, the focus is always on the leader. Even when Vajpayeeji was there — I remember 1998 and 1999 elections were really Vajpayee’s elections. We have seen Indiraji’s elections, Rajiv Gandhi’s elections. When dominant personalities are there, the elections get dominated by them. Now, the same question could be asked the other way. Take Modi away and 90 per cent speeches of the Opposition leaders won’t exist. This election has virtually become a referendum on Modi.


What do you have to say about the level of the political discourse. It has become so bitter, everyone is making personal attacks, whether it is the BJP’s leaders or the opposition Congress, TDP, AAP, TMC


There is a lot of space for serious campaign. I have been speaking, addressing the media, writing all over. Therefore, one of the considerations with us is that even when you criticise, the subtlety of criticism is more important, the satire is more important, the language must be of a particular standardised form….the quality of participants is important, they now need to measure up to the changing socio-economic profile of India’s population.



Wasn’t there panic after December 11 (when results of MP, Rajasthan and Chhattisgarh elections were announced)… going by the series of big bang announcements, EWS quota, PM-KISAN and tax exemption till Rs 5 lakh taxable income?


See, tax exemption of Rs 5 lakh was decided in the early days of our government. In the 2014 elections, I was asked and I said that it is my conviction that when the poor people get out of poverty and join the neo-middle class before middle class expands, India can ride their purchasing power for the next 50 years. That’s why we need to expand that. That is an inbuilt philosophy in me. Fortunately, this is an idea I and PM share. When he asked what can be done, I said income tax exemption should be Rs 5 lakh. But it couldn’t have happened in one go. The revenue loss will be too difficult. In the first year, I increased it from Rs 2 lakh to 2.5 lakh. In the next budget, I exempted another 0.50 lakh making it Rs 3 lakh. Simultaneously, I kept widening the exemptions — housing interest ceiling increased to Rs 2 lakh from Rs 1.5 lakh, the exemptions under 80C was increased to Rs 1.5 lakh. In the third year, we slashed tax on taxable income between Rs 3 and Rs 5 lakh to 5 per cent. We had decided that in the run-up to the elections, we will gradually absorb the revenue loss and will exempt Rs 5 lakh.


What about the other two?


This was being worked with what is the government’s capacity to supplement. We have spent on rural infrastructure. We raised the MSP… Fertilisers and seeds needed some cash support. So let us start with an amount. As the capacity increases, you can increase the amount… there are several subjects on which we have done detailed study and EWS quota was one of the subjects which we had already worked on.


Coming close to the elections, they raise suspicion that they were politically motivated with an eye on elections, that you were on a slippery slope and needed to do something big to arrest that slide. It came after three defeats.


That’s alright. You are entitled to comment. Two of the major states were almost a tie and when you get a tie after 15 years of being in government, it doesn’t suggest a massive anti-incumbency.



The elections, however, seem to about chest-thumping and nationalism.


What makes the BJP or its government of Modi a brand for the elections — it is some content that makes the brand. Hollowness cannot create a brand, chest-thumping can’t create a brand. Ultimately, the quality of the product creates a brand. As I said, on one side, we have a proven honest government, have a good track record of economy, development and welfare of the poor and an excellent record of national security approach. And last, your rivals present a frightening picture — it will be a khichdi, it won’t last two months — there is no ideology.


If you are so confident of development, why are you contesting elections in the names of Pakistan and Nehru?


No election is a single issue election. Is national security not a relevant issue? Today, these kinds of dangerous statements coming from Farooq Abdullah, Omar Abdullah and Mehbooba Mufti, they should not be issues in the elections? What kind of censorship do you want on the BJP? We will make them an issue. Because sovereignty is an issue in every election.


So, you are putting development in the background.


That’s alright. We will make all issues in the foreground. If you disagree with our position, we will defend our position on sovereignty.



Some proxy indicators of discontent over development could be protests by Jats, Patidars, Marathas and Kapus.


These have nothing to do with the BJP. There was a phenomenon, and the best place to study that phenomenon is north India. The phenomenon of the last few years has been that Dalits and backwards have got reservation. The land-owning communities thought the land will sustain them for generations. The non-land owning among the non-reserved categories, they neither had land nor reservation, so they started concentrating on education of their next generation. Prime examples you will see in states such as Punjab, Haryana, UP, Delhi. The baniyas (trading class) children were not ready to go to work in mandis, so besides business, they became dominant as CAs, lawyers, professionals, doctors. To some extent, the Brahmins did it and some other communities also started focusing on education. Many among the land-owning community who thought of the future also did it. But, by and large, a social crisis set in among the land-owning community that land was no longer so remunerative, and the need for education was there. So they needed a catch-up. These are social protests in tune with reality and this is the basis of the 10 per cent reservation for Economically Weaker Sections (EWS) in general category.


There are two indicators that don’t look promising, private capital expenditure has not picked up and…


No. The private investment has picked up, it is now at 14.5 per cent plus capital formation has gone up. It had gone down because banks were not in a position to lend. Banks were squeezed by the previous government, left virtually bankrupt. Therefore, once the health started reviving, the figure has been 14.5 per cent in the last two years.


…the saving rates have declined


Spending capacity of people also increases and spending habits also change. But our saving rates are still reasonably high.



India witnessed 8-plus growth rate earlier on the back of cheap credit, cheap resources, cheap land. Can India sustain it if these factors of production are priced competitively?


First of all, the 2014-19 average on inflation, fiscal deficit and growth are the best five-year period of any government since 1947. Secondly, debt-led growth alone is a dangerous concept. In the 6th five year plan, Indira did not increase revenues or expand the economy but came out with welfare plans and our fiscal deficit touched 6.4 per cent. In the 7th five-year plan (1985-90), the Rajiv Gandhi government organised loan melas and took the fiscal deficit to 8.4 per cent. The result was the debt trap that India got into that and had to rush to World Bank in 1991. …the balance between, fiscal prudence, growth and welfarism has all to be maintained.


How is PM-KISAN different from NYAY, both are income support with different quantum and eligibility conditions? And what’s the fascination of your government to look squeaky clean? The NSSO job data say what it finds. You can differ with it, maybe it is an old way job description captured, but why junk it?


I am not in favour of junking any kind of data. Data has to be in sync with the empirical evidence in the market. The farmers need income support in India, it is undisputed. But merely re-juggling the existing DBT, after having opposed Aadhaar, and repackaging it by a new name is a bluff.


With the benefit of five years’ hindsight, don’t you think we delayed the bank clean-up?


No. we did not. For example, in 2015, we were confronted with a situation where the accounts were hidden below the carpets. We were new in the government, those in the central bank and the banking system who knew the truth were a part of that concealment. And Dr Rajan, therefore, rightly suggested the asset quality review. This was in early 2015, not particularly very late. And then we started the AQR. Then we started announcing first capitalisation programme, second capitalisation programme and in 2015, we appointed an expert committee on IBC. It can’t be drawn over night. It did a very good job. It gave me a report by the later part of 2015. I introduced the Bill. By 2016, we had it passed and we had the board next year. There is not a day I wasted. Therefore the clean-up started.


How do you see the process going on after the Supreme Court verdict.


I think the Supreme Court verdict is only procedural. It doesn’t debar the RBI from issuing directions in a particular case. It doesn’t debar the creditors themselves moving the IBC. The court has not struck down the IBC, it has upheld its sanctity. It has laid down a procedure for the RBI to act. Since Supreme Court is final, the RBI, I am sure, will come out with a fresh circular keeping the present market conditions in mind in accordance with the Supreme Court judgment.


What about the liquidity situation? Despite the currency in circulation going up, the sentiment doesn’t seem to be upbeat, maybe keeping rural economy in bad shape


No. That has nothing to do with it. What happened after demonetisation was that the anonymity of the cash was lost. People deposited the cash in banks, paid taxes, improved digitisation and since the banks had surplus money, they put it in mutual funds. The mutual funds then came to NBFCs. Even when the banks were not lending, the NBFCs became a parallel source of funding. And the NBFCs, in particular the MSME sector, the real estate, the automobile sector, they started pumping. Once this source of funding started, that funding was maintained. The present liquidity crisis has something to do with a squeeze both on credit and liquidity that had come towards the later part of 2018, particularly post-June. And I had been flagging this issue publicly that RBI must liberalise else it will affect growth. And I do believe, among the various factors that may have affected the third quarter’s growth, this is one factor.

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