Excerpts from interviews with M R Sivaraman, IAS (Retd), former Union revenue secretary and V Balaraman, former MD, Pond’s India and head of exports Hindustan Unilever.
IE: Inflation is a concern. Your views on tackling this.
M R Sivaraman (MRS): If the government released 10 million tonnes of foodgrains from its stock of 90 million, food prices will come down and along with it, other prices. Tightening interest rate is no solution. In the last few years, interest rates have remained high as also inflation. In contrast, interest rates in Japan have been near zero but growth has also been zero with near zero inflation.
India should go in for selective interest rate policy to step up growth. Economists are like witch doctors and practise their medicines on the people as taught. Taylor’s rule says that interest rates be hiked when there is inflation and that is what RBI Governor Rajan has done.
V Balaraman (VB): The first step is to work in co-ordination with the states. The Agricultural Forward Market Commission should be scrapped. There is evidence now that intermediary traders and brokers sit on these and make sure that supplies are hoarded and prices kept high. In states in which Congress took action to scrap these, prices have fallen. Sustained inflation over several years has to be tackled as a supply side problem.
IE: How do we impart dynamism in administration that is in a state of paralysis?
MRS: Administration is paralised because bureaucrats are selected for loyalties and not on performance, leadership and integrity. As a result they cannot lead from the front, they fail and when confronted with problems, they hold the coat tails of their political patrons.
VB: I feel that Modi, if elected PM, can bring about a change to the current state of politics. He has proved himself in Gujarat and if given a chance at the Centre we can expect quite some change. We will get a government better than today’s and in my view the chances are good.
IE: Five quick implementable suggestions for the new government.
• Foodgrains should not be accumulated and should be allowed to go to the market and find their price. Farmers should be freed from all controls regarding sale of foodgrains.
• Deploy all Chief Commissioners of IT only to monitor construction and gems and jewelry sectors to ensure that no black money is generated.
• Select officers as Regulators and Secretaries after public interviews. Those in the panel should be publicly announced and public should be asked to comment on their total integrity and competence. As most would have been in the field people know them by character and competence.
• Industry should be free from seeking prior approvals but must be told to adhere to laws and rules. Before commencement of production, the units should be investigated whether laws and rules have been adhered to.
• All government assets must be given away only by transparent auction.
• Citizen’s charter for services by the Central government.
• Stronger Lokpal and quick action against errant politicians.
• Look for a Brown revolution that will augment supplies of poultry, eggs, goats and sheep following the Suguna Chicken /Mother Dairy examples in both public and private sector.
• Prioritise action on infrastructure investment
• Scrap all subsidies in one determined action.