India could break the chains of under-achievement and begin attaining higher rates of economic growth in the 1990s only after it discarded the influence of that Soviet model, said Bharatiya Janata Party President L K Advani at the CII's Annual Session and National Conference in New Delhi on Wednesday.
He also laid down a roadmap to achieve double-digit GDP growth rate for the country.
Following is the full text of his speech:
I am pleased to be with all of you this morning. CII's Annual Sessions provide an excellent platform for political and business leaders to exchange views on the economy, the wider policy and governance environment, and the overall direction of the nation's development.
I find from the title of the subject given to me, 'Towards Double-Digit Inclusive Growth', that there is a very significant word in it -- 'Inclusive'.
This word has many meanings, and I'll come to that later in my address. But the point I wish to make here is that, the mindset of the ruling political establishment in India became inclusive towards businessmen, private enterprise, and the professional class only after the advent of the economic reforms in the 1990s.
Previously, this category was excluded because, under a perverted understanding of socialism, it was argued that 'the private sector is an exploiting class' and 'profit is a dirty word'.
Those in the ruling party and government had a mindset that believed in things like -- 'We in government know everything'; 'Don't give us your views on policy matters, just give us your money for the party fund'; 'It's not good for politicians to be seen publicly in the company of businessmen, never mind if you meet them privately.'
Without sounding immodest, I can claim that the Vajpayee Government gave a big boost to such interaction with the business community, including at the level of policy formulation. This is because my party never supported the license-permit-quota raj.
A critique of the phrase -- 'Hindu rate of growth'
Excessive state control over the economy, corruption, and bureaucratic red tape were the direct and inevitable outcomes of the old mindset. It is because of this that the legendary entrepreneurial spirit of India remained chained for the first nearly forty years after India cast off the chains of political slavery. It is also principally because of this that the growth of our infrastructure, agriculture, industry, trade, and services suffered and India came to be seen as a country of low achievement.
In the pejorative and deeply offensive description that somehow gained wide currency, some experts even declared that India cannot do better than the so-called 'Hindu rate' of 3 to 4 per cent GDP annual growth rate.
Here I am provoked to ask three questions:
Which party is responsible for India's low growth rate for nearly three decades after Independence? I leave out the first decade since it was a period of independent India's infancy and also because some remarkably far-sighted developmental initiatives were taken in the first ten years.
Which party is responsible for the economic growth not being inclusive? After all, if a vast section of our population and large geographical areas of our country remained excluded from the fruits of development, those who ruled the country for the longest period of time must surely bear responsibility for this slow and exclusive growth.
My first two questions may be directed at my friends in the Congress party, but my third question is directed at them as well as at all of you in the business and intellectual class. Why have you allowed the earlier low rate of growth to be called the 'Hindu rate of growth'?
By the same logic, it should be possible to call the 6 to 7 per cent GDP growth rate that India has now begun to achieve also as the 'New Hindu Rate of Growth'.
Is it anybody's contention that some non-Hindu entity was responsible achieving this higher rate of growth after the 1990s? After all, it is under the government led by the BJP, which is usually described as the 'Hindu nationalist party' that we Indians recently demonstrated that we can even achieve an 8 per cent GDP growth rate.
I am raising these questions because, consciously or sub-consciously, the word 'Hindu' is sought to be associated with low achievement. I am proud to be a Hindu and I am proud to be an Indian. And as Mahatma Gandhi said, my pride in India stems principally from my pride in Hinduism, which teaches me to respect all faiths.
Therefore, I feel amazed and hurt when I see that it has become fashionable these days for some people in the elite classes to distance themselves even from the word 'Hindu' and to surround that word with various negative connotations.
Antyodaya and Integral Human Development
Even the use of the word 'inclusive' is an unfortunate victim of the current political and intellectual discourse. In itself, it is not only harmless but also contains a positive social and ethical meaning. Indeed, I believe that whatever the rate of GDP growth, economic progress has to be always inclusive, it must always care for the last man first.
This is the meaning of Antyodaya, which has been a guiding principle for my party's economic thinking.
It is equally important to note that 'inclusive growth' does not only mean fulfillment of the economic needs of all sections of society. In an ideal sense, it should also mean inclusive of all the other facets of human development -- social, cultural and spiritual.
In other words, rapid economic growth should not lead to lop-sided development of mankind, as is indeed happening today. Rather, it should contribute to the integral development of man, as is envisaged by all our seers.
Therefore, I have no objection to the use of the term 'inclusive growth'. However, what I do object to is that the current ruling dispensation and its supporters, the Communist parties, have been using the term 'inclusive growth' to somehow convey the message that the previous government, and the leading constituent of that government -- namely, my party, the Bharatiya Janata Party -- were votaries of an exclusive ideology.
It is being said that the BJP was exclusive towards the poor and exclusive towards certain social segments.
Communists have no right to talk of 'inclusive growth'
It is indeed ironic that those whose dogmatic policies are a prescription for increasing poverty, perpetuating backwardness, and promoting corruption and bureaucratism should be talking about 'inclusive growth'. Contrary to the propaganda of our Communists here, the Soviet Union neither achieved high growth nor banished want.
Let us make no mistake: India could break the chains of under-achievement and begin attaining higher rates of economic growth in the 1990s only after it discarded the influence of that Soviet model. And as I have often said from several public platforms, the credit for initiating this transformation goes to the then Finance Minister and present Prime Minister, Dr Manmohan Singh.
It is difficult not to mention Communist-ruled China in the context of any debate on double-digit growth. Again, let us make no mistake: if China has achieved impressive economic growth over a sustained period, it is only because they implemented policy reforms, each of which the Communists in India have opposed and are continuing to oppose.
I never cease to be amazed by the hypocrisy of the Indian Communists. For them, it is okay if China carries out economic reforms, but India must not. It is okay if China becomes a nuclear weapon nation, but India must not.
It is okay if a Chinese leader says, 'It does not matter of which colour the cat is, so long as it catches the mice', but for the Communists, India must follow the dictum: 'It does not matter if the cat cannot catch the mice, but it must be of red colour.'
It is okay if Shri Buddhadeb Bhattacharya, West Bengal's Chief Minister can advocate economic reforms in Kolkata, but his party must oppose the same reforms in New Delhi -- irrespective of whether it is the NDA or the UPA in power at the Centre.
It is because of this kind of dogmatism that the Communists have been fanatically opposed to every piece of economic reform -- in P V Narasimha Rao's time, in Shri Atal Bihari Vajpayee's time, and now in Dr Manmohan Singh's time.
And everything they opposed has since been proved as a correct and beneficial decision. They opposed the introduction of computers in banks and government offices, which has led to greater efficiency. They opposed the entry of private airlines, which has now led to a boom in civil aviation. They opposed the entry of the private sector in telecom, which has led to a telecom revolution in India.
Communist influence will be a liability for the government
Therefore, the first thing that India must do to achieve 'Double-Digit Inclusive Growth' is to marginalise the ideological and political influence of the Communists, for their policies will neither deliver inclusive growth nor double-digit growth.
As the Leader of the Opposition, I am not expected to give such advice as is intended to enhance the government's longevity. Nevertheless, in the national interest, I wish to caution Prime Minister Dr Manmohan Singh: 'Your dependence on Communist support will prove to be a liability for anything good you may wish to do.'
My second suggestion to the Prime Minister, which too I am making in the national interest, is: 'Please do not fall prey to the politics of vindictiveness, negativism and confrontation, for this too will impair any good that you may wish to do.'
If 8 per cent growth was 'Mungeri Lal's Haseen Sapne', then would double-digit growth be 'Mungeri Lal's Hallucinations'?
Specifically, the government seems to have decided, as a matter of political strategy, to de-emphasise, denigrate, and discredit every achievement of the Vajpayee government.
In a sense, this derisive attitude towards the NDA government started even when those in power today were in the opposition. All of us know a very responsible person sought to rubbish the Vajpayee government's attempts to achieve 8 per cent GDP growth rate as 'Mungeri Lal's Haseen Sapne'.
By that logic, our present discussion on how India can achieve double-digit growth must qualify to be called not just 'Mungeri Lal's Haseen Sapne', but 'Mungeri Lal's Hallucinations'!
Friends, we did not follow this approach of denigration of previous governments. Shri Atal Bihari Vajpayee acknowledged in Parliament that the agenda of economic reforms that his government followed was a continuation of what the Congress government had inaugurated. On different occasions, he paid tribute to Pandit Nehru, Indira Gandhi and Rajiv Gandhi.
I have myself expressed praise for Dr Manmohan Singh as a person in several public meetings.
Politics of vendetta will boomerang on the government
But I am sad to see that the ruling party has not reciprocated this approach. The NDA is being constantly run down. Such illiberalism in our political culture does not augur well for either for our democracy or for our economy. What I am particularly concerned about is that this political illiberalism is now leading the government to a policy of vindictiveness.
Take the case of the politically motivated CBI inquiry in certain defense purchase deals, which has put a spanner in our defense establishment's plans for rapid modernisation. I need not explain to this audience how this would also affect the plans, vigorously advocated by CII, of the Indian industry to play a bigger role in the production of defense equipment and systems.
Another stark example is the proposed probe into the divestment of Centaur hotels in Mumbai. The only motive behind this move, mooted most vocally by the Communist parties, is to malign Shri Arun Shourie. And the only reason why they are doing so is because few intellectuals in India have unmasked the long history of Communist betrayals with such scholarship and firepower as Shri Shourie has.
Shri Shourie has said that he is ready to face any probe, and I have little doubt that he'll come out clean. But I have a word of caution for those in the government: 'Don't proceed on this path of vendetta. It will bite you. The barking Communists may not bite, but the action they and some others are pressuring you to take will certainly bite you.'
Indeed, this entire episode makes me wonder: What kind of government is this which shamelessly defends the worst kind of criminals and yet wants an inquiry against a person like Arun Shourie whose uprightness is not disputed even by his critics?
One year of the UPA government:
Anti-BJPism is not in the interest of healthy democracy or faster development. Friends, the UPA government is about to complete one year in office. There is a celebratory mood in official circles. The Prime Minister has given himself 6/10.
Predictably, the ruling party has given the Super Prime Minister 10/10.
Equally predictably, the Congress president has charged that all the 'ills plaguing India' are 'a legacy of the NDA rule'.
But there is something surreal about this government. Not a day passes without the Communists announcing that they are 'dissatisfied' with the performance of the government to which they provide life support. Indeed, they have given the UPA Government 0/10.
The only glue that holds this strange coalition together is anti-BJPism.
There was a time when anti-Congressism was the principal driver of Indian politics. Today, it is replaced by anti-BJPism.
If the former was wrong, the latter is equally wrong.
A vast and diverse country like India can never be governed well if the ruling party or coalition is driven by a purely negative agenda. Such a negative agenda can never help the country to realise its full potential.
To achieve double-digit inclusive growth, India needs a positive agenda built around the principles of consensus and cooperation.
After all, in a multi-party democracy where it is common for governments to change from time to time, a nation can achieve great goals and ambitious targets only through broad national consensus. When we were in government, we sincerely and consistently tried to enlarge the area of consensus on economic and other issues.
Even today, the BJP is willing to support the government on any reform that is vital for India's economic progress. However, the government must demonstrate that it respects the role of the Opposition, and creates a conducive atmosphere for the Opposition to partner the government in important national decisions.
Five thoughts for double-digit inclusive growth
Friends, I did not want my address today on a business platform to have political overtones. But I had to place the theme of my address -- 'How to Achieve Double Digit Inclusive Growth' -- in its proper national context. Now I turn, briefly, to presenting five specific thoughts.
One, both the central and state governments must continue to focus on rapid expansion and modernisation of our infrastructure. We must especially consolidate our gains in information technology and other areas of the knowledge economy.
The work on ambitious infrastructure projects such as the National Highway Development Project, the Pradhan Mantri Gram Sadak Yojana, the Indian Railways' Rashtriya Rail Vikas Yojana, modernisation of our airports and construction of greenfield airports, the Sagar Mala project for the modernisation of our ports infrastructure, the many initiatives on urban renewal, implementation of power sector reforms as per the Electricity Bill 2003, strengthening of our Science & Technology infrastructure -- all this must receive strong, focused and sustained attention.
I am sorry to say that the implementation of many of these projects has slowed down, especially the power sector reforms. If the alarming situation in Mumbai and Maharashtra is any pointer, then we must realise that we cannot live in the past and continue with old attitudes about the role of the private sector in electricity generation, transmission, and distribution.
Two, not just physical infrastructure but also our social infrastructure needs similar strong, focused and sustained attention. In particular, the needs of our SC, ST and OBC brethren must become our collective priority. Faster economic growth without social justice is an affront to our Constitutional ideals.
Here, learning from past experience, we must admit that the capability of government agencies to implement social sectors programmes and deliver results does not inspire confidence. Therefore, I am all for the widening and deepening the scope for public-private partnerships in education, health-care, drinking water supply, sanitation, housing for the poor and middle-classes, slum rehabilitation, etc.
Three, a big area of much-needed reforms is agriculture. Your incoming President has made a name for himself on agricultural issues and I hope that in his Presidency, CII will promote reforms in agriculture, marketing, technology transfer, food processing, etc. I am aware that agriculture is a state subject and states have to take the lead. I am pleased that Madhya Pradesh, a BJP-ruled state has been leading the reforms in agriculture marketing.
Four, another important issue is to promote good governance reforms, both at the Centre and in states. I've long held that Swaraj in India was not followed by Su-Raj. I understand that CII has recently done some brainstorming workshops on this subject of state-related reforms. This is important, and you must push as hard for reforms in states as you did for economic reforms at the Centre in the last twelve years. We need to make state governments -- the executive, the legislature, and the judiciary -- realise the importance of faster reforms.
In this context, you will be pleased to know that earlier this month we organised a three-day training workshop near Mumbai for all the ministers of the BJP-ruled states -- Gujarat, Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand, Orissa and Nagaland (our party is a coalition partner in the last two states). It was the first of its kind for any political party in the country.
While on the point of good governance, I must emphasise that this should not be confined only to Raisina Hill; it is also needed in Nariman Point. Corporate India must also follow the relevant norms and rules of good corporate governance -- both in letter and in spirit.
Five, the imperative of achieving high growth with employment and equity has to be a common commitment for both governments and the business community. India's overwhelmingly young population needs adequate opportunities for rewarding employment and for realising their increasingly ambitious dreams.
The informal sector and the Small and Medium Enterprises (SME) sector have the highest potential to generate employment. Therefore, there is an urgent need to remove the difficulties being faced by these sectors.
In this context, I welcome the recent initiative of the CII to launch a nationwide campaign for skill development and productivity enhancement in these sectors.
Esteemed captains of industry, let me summarise what I have said so far in three affirmations.
Can India achieve double-digit growth? Yes, we most certainly can. Indeed, we must if we want to make India a Developed Nation by 2020.
Should this growth be inclusive? Yes, it has to be; otherwise imbalances in development will create more problems.What is needed for India to achieve double-digit inclusive growth? A culture of cooperation between the government and the opposition, a culture of partnership between the government, business community and people's organisations, and above all, commitment to good governance.