Mr. Sanjaya Baru, the author of The Accidental Prime Minister, is a political commentator and a policy analyst and a Distinguished Fellow at theInstitute for Defence Studies & Analysis.
1. Seeing the current situation of India's economy amidst the pandemic, in which sectors should India invest to get the best returns, and what do you predict will be the country's position post-COVID?
Mr. Sanjaya Baru: The fact about the current situation is that it is something new and one that we have never faced before, neither in India nor in any other part of the world. An economic situation in which there is so much uncertainty about the way economic agents, like investors and consumers, would behave is very difficult for economists to analyze. We, therefore, have to begin with the proposition that we are in a completely new context where there is uncertainty about the future, and, therefore, the first policy measure that any government has to take is to inject some element of certainty.
The question then is, how will the government do so. One way is that they can have a one, two, or a three-year plan wherein the governments can specify the projects they will take up and build infrastructure and invest. We began planning in the 1950s when the private sector was still small. But today, the private sector is not small, but it is being constrained by uncertainty. Hence, as far as policy is concerned the government has to step in and play the role of an investor and launch new projects. The government can then decide what are the priorities, and where it needs to invest, whether in roads, housing, or defense, for example. They also need to offer a timeline of the investment that will occur.
That is just the first step. The second would be to assure individuals that their jobs are not at stake. That is where we have failed. Unemployment is rising. Even in the media, people are losing jobs. In 1991, when we entered into an investment program with the International Monetary Fund (IMF), Prime Minister Narasimha Rao told the IMF chief that whatever policies are undertaken, he would not allow people to be unemployed. Today this is very important, particularly for young people. I hope the government comes up with a law that prevents people from firing workers until the COVID uncertainty ends. Unless people have confidence in the future, it is very difficult for us to come out of the pandemic.
2. While global experts are talking of a 'Great Reset' in the structure of the economies, promoting better business practices and cleaner industries, India seems to be going back in time with its policies of suspension and dilution of labor laws. Accordingly, do you think India can be part of this 'Great Reset' initiative?
Mr. Sanjaya Baru: As far as labor is concerned, it is essential in the current context to assure people that they will not lose jobs. You can have a change in the manner in which people are employed and also have a change in the contracts. For example, for the next one year, the employed will take a 25% to 50% salary cut. People can deal with reduced income, not with unemployment. Instead of firing people, you can negotiate so that the companies can afford to hire people.
As far as the overall investment environment is concerned, India continues to be a country in which the bureaucracy interferes too much. We need to allow people to invest wherever they find a new opportunity and find new ways of earning income. For example, some time back, the Delhi government had come out with a rule that you cannot sell vegetables on the street, and the police made a lot by collecting money from the vegetable vendors who had nowhere else to go. Now the need is for simple laws that will create income opportunities by allowing people to make income in whichever way they can.
In my home city Hyderabad, whenever I visit there, I can see more and more people selling cooked food on the streets, which has become a common practice. In the early morning, a lot of people, especially widows, sit on the street side and sell food to workers going to work. All of this is technically illegal since you do not have any food license or any other permission to sell on the street. I feel we are in an economy where we have to simplify the laws to allow individuals to make income by whatever means they can and then can return to a better organization system when the economy gets to 10% growth.
India, as of now, needs to get back to at least an 8% growth rate, which is a real challenge as this year's growth is going to be negative. Last year itself, the growth rate was 4%, so the question is how will we get from 4% to 8% unless we make it easier for people to spend money, to earn, to invest, and to consume. These are some of the measures that they need to take.
3. A study shows that India’s GDP could fall by more than 20% with warmer temperatures. Do you feel now is the time to prioritize sustainable and eco-friendly growth?
Mr. Sanjaya Baru: There is a short-term challenge, as well as a long-term challenge. The short-term challenge is a transitional challenge in which you move from existing technology to new technology. If you talk about automobiles, for example, from the viewpoint of sustainable development, for the diesel-powered vehicles, the short-term challenge is how will you make the transition, with so many diesel-powered vehicles, like buses, cars, etc. Also, the time frame in which you will be able to make that change since you need to warn both the consumers as well as the producers of the planned change. We need to be realistic about these timetables.
The long-term challenge is that we are still a low income and low per capita income country with just about $2000 per capita GDP. We have a long way to go in fulfilling the expectations and living standards of a majority of the population, which means that we will be consuming more energy like coal and oil. The switch to renewable and newer technologies which will be a long-term transition. Our strategy in climate change negotiations is to allow India the time to make that transition. If you suddenly come and tell India that ten years from now you cannot use coal, that is impossible. We have coal for the next hundred years, although we may not use it for the next hundred years. We certainly will be using it for more than ten years, so we also need a long-term strategy. What is needed is both a long and a short-term strategy to make the transition to sustainable and renewable sources of energy. For example, for building and construction, better building materials need to be used. There are several questions we need to face sector-wise and nationally, and we need a planning commission and think tanks to solve these issues, both short-term and long-term.
4. We see Indian political actors continuously repeating the decisions they deem successful in containing the pandemic, like Spotify ads playing on loop. But we see that there is a scarcity of questions from the public. So, what are the questions that the public should ask the government? What are the hidden flaws that the public should hold the government accountable for, in their handling of the pandemic in the country?
Mr. Sanjaya Baru: First and foremost, the public should demand that the people whom we have elected should meet as we have not had the Parliament session or any state legislature sessions in four months. They can meet virtually with adequate distancing. The Parliament and the assemblies need to convene, and hence firstly, the representative institutions of democracy should function. The second thing that we should demand is for the better center- state coordination in dealing with the pandemic. We have seen in the past five months that first, the Centre was pretending that they know how to handle the situation. The Prime Minister was on television asking the entire country to come out and bang Thallis, etc. He took decisions without notice, like abruptly imposing the lockdown. From there we have gone to the other extreme of allowing state governments to make decisions that have national implications. Every state is functioning differently in terms of handling the pandemic, and it seems as if you are living in different countries. You cannot even cross borders between Gurgaon and Delhi. Hence, we need a much more coordinated approach between the Central and the state governments than we have had in the past five months.
5. With the current scuffle and hostile relations with its neighbors, what seems like the best approach for India, in terms of its foreign policy?
Mr. Sanjaya Baru: First of all, we need to realize that the problem we have with individual countries is different. We have good relations with countries like Bangladesh, Sri Lanka, and Bhutan. We also have stable relations with Myanmar and Indonesia with whom we share a maritime boundary. They are also our neighbors. We keep forgetting that. We only consider the neighbors with whom we share a land boundary but, Indonesia and also Oman are our neighbors. The problem at the moment is with Pakistan, China, and Nepal. But each of these has a very different context. With Pakistan, we have had long-standing issues, which is more of a domestic issue now and a legacy of the partition. It is a religious contention between Hindus and Muslims, and they need to come together and understand that they need to live together and that you cannot let your past destroy your future. Pakistan is a very special situation, which will take a long time to resolve. As far as Nepal is concerned, the politics in Nepal keeps going up and down. We have had difficult relations with Nepal even in the past. When Rajiv Gandhi was the Prime Minister of India, there was a blockade of movement of goods, and we had a bad situation. Once again, with the assassination of Nepal's King and family and the Maoist revolution there, we have seen lots of ups and downs in Nepal.
China is a new situation, and we need to look at it in both the long-term and the short-term, and the fact is that we have had substantial differences with China on the border that we need to resolve. Resolving the border issue requires India to also make some concessions. All the printed maps of India are not relevant and are outdated, and at some point, we need to come to terms with it. China has to come to terms with the fact that Arunachal Pradesh is a part of India, and they need to accept that. Similarly, Aksai Chin is a part of China, and we have to accept that. These are long-term changes that we need to come to terms with. Right now, there is a border conflict with the Chinese, in which the Chinese sent in the troops, and we need to push them back, and that is what we have been trying to do, but the real challenge from China is an economic one. Both countries were similar in terms of the economy around 40 years back but, today, China is much bigger than us, and the Chinese have become a major global economy. We continue to be a poor developing economy. So, we need to become economically more competitive, developed and move forward, and only on that basis, we can finally restore some equilibrium and peace.
6. With everything going on, is this situation the right time and opportunity for Pakistan to increase its dominance over Baluchistan?
Mr. Sanjaya Baru: I'm not keeping track of what is going on in Baluchistan. Pakistan has a strong relationship with both the United States and China and, we in India need to accept that. In fact, many Western countries have good relations with Pakistan. Even Russia has good relations with Pakistan. So, the Pakistanis are in a stronger position than they were ten years back. Their interest in resolving disputes with India has also gone down because they feel they are in a position to manage whatever problems they are dealing with, and this is a reason to take a fresh look at our policy with Pakistan.
7. In your opinion, is Narendra Modi’s foreign policy towards the US and relations with Donald Trump headed for the good, or are they going to impact us in the wrong manner?
Mr. Sanjaya Baru: We need to understand the fact that relations are always between the two countries and not between two leaders. The relationship between India and the US has been becoming strong over the last 30 years. The first Indian prime minister to turn the relations around was Narsimha Rao in 1991-95, then came Vajpayee, and then came Manmohan Singh and now Narendra Modi. In these 20-30 years, the Indo-US relationship has become stronger although there are issues that we have differences on. We do not see eye to eye on many issues on which we have no convergence of opinion. Whether it is Donald Trump today and Joe Biden tomorrow or Narendra Modi today or another leader tomorrow, these challenges may remain. Policies go beyond leaders, so let us look at the bilateral relations. I think for India, the US relationship is very important, but it is not the only one, and the US needs to understand that. The external affairs Minister Mr. Jaishankar made this point recently, in one of his speeches that America needs to understand that we are living in a world of many powers and India will have good relations with the US but it will also have good relations with Russia, with France, with Germany, Japan, and even Iran, those countries which the US might not have good relations with. Therefore the fact is that our relations with the US have improved, but they will have to be in the context of our relations with other countries.
Now the situation that India faces with both China and Pakistan; the U.S. is taking a position that is more helpful than it would have ten years back. Earlier, the US was not cooperative in dealing with China and Pakistan, but, today, the US takes the challenge from China more seriously and realizes that India is a more reliable country and better as a long-term partner than Pakistan.
8. The Indian National Congress is slowly losing its control, and more of coalitions or BJP led states are in power. What, according to you, should INC do to revive itself?
Mr. Sanjaya Baru: So firstly, they should have organizational elections. I don't remember when was the last time that they had such elections, and the party has to revive itself from bottom-up and not from the top down. Secondly, Sonia Gandhi and Rahul Gandhi need to realize that their time is over. In democracies over the world, when a political leader takes a party to the electorate and loses the elections, they resign. But in India, the politicians do not resign when they lose the elections, like when Advani lost the election in 2004, and he was the leader of BJP, he did not resign. Again when he was the leader of BJP in 2009, he did not resign. Finally, in 2014, when Narendra Modi came to the party, removed Advani and then BJP finally came into power. When Congress lost power in 2014, neither Sonia nor Rahul resigned. Then, when they lost their elections in 2019, they did not resign. So after any election, if you lose, you need to go. You cannot wait to come back after five years and get re-elected. Hence, new leadership is needed in the Congress party, which means it should have organizational elections at the district level, constituency level, state-level. Those elected to these committees should then elect the national leaders. Hence the party needs to build itself from the bottom-up level, which is a long-drawn process but, it is necessary, as they cannot rely on Sonia Gandhi or Rahul Gandhi or Priyanka Gandhi or some other Gandhi for every election.
9. Your book The Accidental Prime Minister has been well acclaimed. What was your motive behind writing the book, and what are your thoughts about some of the issues that came up after the book and the movie was released?
Mr. Sanjaya Baru: All over the world in all democracies, there has been a long-standing tradition that the press secretaries of the head of government come out and write books. This is very common in the US, for example, where every single press Secretary to the US President has written a book. Even in India, several press secretaries have written a book after their terms. By and large, in India, people say politically correct things and nothing controversial in whatever they say. Whenever you write a book praising an individual, everybody thinks that this person is being nice to the government by not being controversial but, when you write a book in which you praise and also criticize, it becomes controversial, and that is what happened with my book.
Mao Zedong once said that every person cannot be 100% good, but if a person is 70% good and 30% bad, that is alright. In my book, I said Dr. Manmohan Singh was 70% good and 30% not good. The book presented both sides. Which is why it becoming controversial as the opposition used that 30% putting the 70% aside. But I feel I wrote an interesting book that tells the story of a certain period. It tells the story of how the government functioned, with both its achievements and its failures and the individual achievements and failures of Dr. Manmohan Singh.