P Chidambaram says there cannot be two systems in the country, one for the rich and another for rest

Of course, the situation requires a complete rethink and revamp of the economic policies that are being pursued by the NDA government. The government has brought down the GDP growth rate from 8 per cent to minus (-) 7.5 per cent. This is the nadir. How can anyone defend the current economic policies that have wrought such havoc on employment, incomes/wages, household savings, and consumption? The crisis of 1991 was caused by a severe macro-economic imbalance. The present crisis has been caused by inept and incompetent economic management. The levers available to the government are Direct Benefit Transfer (DBT), reduction in fuel prices, reduction in indirect taxes and capital expenditure.

We are not back to the situation we faced in 1991. Today, our forex reserves are very high. We have in place regulators like SEBI. However, our growth rate has plummeted. Unless we restore the growth rate, there cannot be any meaningful development or enhancement of welfare. In that sense, there is a crisis for the poor and the middle class.

Whatever may have been the intent behind the farm Bills, the fact is the Bills are opposed by the farmers, especially of Punjab, Haryana and Uttar Pradesh. The knot has to be cut. The only way to do it is to start on a clean slate. Repeal the present laws and draft another law in consultation with farmers’ associations. Repeal and re-enactment is the only way out of the current impasse. Once the government and the protesting farmers reach an agreement, a Bill may be drafted and passed unanimously. Why is the government not taking the sensible route that I have outlined above?

There is no dichotomy. Enhancing Work, Wealth and Welfare are the common goals of liberalisation and a Welfare State.

When there is a recession or a prolonged economic slowdown, the most effective tool appears to be ‘fiscal stimulus’. This was tried successfully post 2008 and again during 2011-2013. Unless we find a better alternative, I am afraid that we must resort to fiscal stimulus; of course, it has to be calibrated and carefully managed. Whether it will accompanied by a new wave of liberalisation and privatisation, only time will tell.

NYAY or a similar welfare scheme is intended to help the poor and to unleash their productive capabilities. Welfare is a larger question linked to Human Development Indicators (HDI), reduction of inequalities, quality of life, environment and social harmony. The two pillars of welfare are healthcare and education. We are obliged to make quality healthcare and education equally accessible to all the people. We know that, today, it is not. We cannot have two systems in the country, one for the rich (10 per cent) and one for the rest (90 per cent).

I maintain that the private sector must play the lead role in all areas of economic activity. The best example is agriculture. Nearly all private goods and services can be produced by the private sector. The issue becomes debatable when it concerns “public goods and services”. Roads are public goods. An average citizen would expect that a road is “owned” by the State and not by a private person. However, with new instruments like PPP, we have found a way through which even a National Highway is “owned” by the State but “maintained and managed” by a private entity. Railways is more complex: there are no black or white answers. We have to experiment with different ideas and find models of ownership and management that will enhance the efficiency of the Railway system.

Monopolies are suspect. Monopolies can lead to grave economic challenges. Growing inequality is one such challenge. An oligopoly is only one step short of a monopoly and, in my view, just as suspect and dangerous. We must have strong laws and strong enforcement against emergence of oligopolies and monopolies. The Competition Commission has proved to be somewhat disappointing.

I am not familiar with the details of the subject. I know that India has accepted some goals on reduction of carbon emissions; we must strive to achieve those goals. Finding and using alternative sources of energy (to reduce dependence on coal and other fossil fuels) is an important element of the global climate strategy.

The so-called post-globalization world that you describe is because of leaders (in this case, former President Trump and Prime Minister Modi) who do not understand the value of globalization and free markets. Atmanirbhar is a throwback to the days of import substitution, export pessimism and protectionism. We are already paying a price for the reversal of liberal policies. The sooner the country realises the folly of the current policies, the faster will be the economic recovery.

I will not say that our IT industry has plateaued. We must remember that we are not running a solo race. Just as Indian industry is improving its capabilities and reach, other IT companies of the world are also improving their capabilities and reach. We have to increase our pace. Innovation, R&D and disruption are the keys. If we can create an environment that will reward these risk-taking attributes, we can outpace the rest of the world. It will be a hard and long toil.

The Modi government has no faith in economic expertise. It eased out Dr Raghuram Rajan, Dr Arvind Panagariya and Dr Arvind Subramanian. I congratulate the Government of Tamil Nadu for bringing world-renowned economists to advice the government. All wisdom cannot be found only among political leaders and civil servants. The advice of independent and objective economists is a valuable input to policy-making and governance. We benefited by this approach during the UPA government.

If socialism is defined as enhancing work, wealth and welfare, I continue to be a socialist!