HT interview: Economy relevant to elections, says Nirmala Sitharaman

Finance minister Nirmala Sitharaman has been on the campaign trail, across southern India, and also parts of the North-East. She spoke to HT on polling day (for the first phase of the Lok Sabha elections), and discussed her party’s prospects in Tamil Nadu, electoral bonds, charges that federal agencies go easy on people who join the BJP, and the state and outlook for the economy.
We are speaking on voting day and if the Bharatiya Janata Party has to touch its target of 370, this phase is critical. How is the party poised?
I’ve spent some time campaigning in the South. Clearly, there is a good buzz about the BJP. Across Kerala or Tamil Nadu, there is an openness to talk about the party, openness to talk about how every one of the schemes has reached every corner of the country, also to see that in the 10 years, majority of what was promised in previous manifestoes have seen the light of day. So there’s this goodwill coming through in public perception. Our vote shares will go up, and how many will transfer into seats [is to be seen].
The intensity of your campaign in Tamil Nadu, a state where no national party has had a significant presence since the late 1960s, suggests you are sensing something on the ground. What?
Tamil Nadu had this very clear distinction : local regional parties for assembly and a national party for Parliament. The late 1960s, early 1970s onwards, Congress has been, knowingly or unknowingly, actually conceding that space even for Parliament [seats].
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Everything that happens from Delhi, the good work for Tamil Nadu that can benefit Tamil Nadu — there weren’t enough articulations of these in the state They left it to the regional party. And for negative things like the Tamil fishermen issue (when the Sri Lankan navy picks them up while they are on fishing trips in international waters), the blame used to go to the Centre. So, as a result, it was an open field for the Dravidian parties to say nothing is being done in our interest in Delhi. In 10 years of UPA, which ended in 2014, you had nearly nine ministers from DMK, but despite that, you had a ban on Jallikattu, and decisions taken about Tamil Nadu’s economy which didn’t reach them. The decision about Katchatheevu in the 1970s highlights the larger point that I want to make: the DMK has been blaming the Centre for this. All these years, they said it happened against Tamil Nadu will, and that the state government didn’t know anything about it. That’s not the truth. What we wanted to bring out is the hypocrisy, the lies, that the DMK has been propagating. We’ve heard it for 50 years, and the Congress has played, “who cares?”. As a result, they never said the then chief minister Karunanidhi was informed of this decision [to recognise the island as part of Sri Lanka].
What we see is clearly the failure of both the Dravidian parties. They conveniently built an argument that “we are very different people, our problems are something which only our parties that can understand, nobody cares for us because the people from North are different from us; and their language and our language is very different”.They have gone to the extent of carrying that message forward in an extreme language. The extreme language is also thanks to EV Ramasamy, Periyar.
Which states do you think you’ll see gains in? Is 370 a rhetorical figure?
No; it’s been said by the Prime Minister and also the party units in every state want to do better. So, if every state is trying for that one additional seat, you get it to 25. That is why we are also trying our best in states such as Tamil Nadu, Telangana, Andhra Pradesh, Pondicherry and Kerala.
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How relevant is the current state of the economy, how people feel about the economy to these polls?
It’s very relevant because, probably for the first time, people have seen issues pertaining to their economic well-being being taken up and being implemented. The word beneficiary, labharathi, is everywhere in the country. I was in Mizoram day before (Wednesday) and I asked them, “have you all received houses?” Their hands went up. Ujwala (cooking gas)? “Yes.” Even in a place like that, which is closer to Myanmar rather than to Delhi, people had received piped water, gas, toilets, were benefiting from the Mudra yojana. The way in which implementation of these people centric schemes has been done is astonishing. So, coming back to your question, the economy matters to the common man.
Are you worried about inflation being a factor?
Despite so many odds, we’ve kept the inflation within the tolerance band (of RBI; under 6%) . And there weren’t so many challenges even after the global financial crisis. Back then, for 22 months , food inflation was in double digits till May 2014. I want to list out all that I have done. Procuring wheat; branding atta under the Bharat brand and selling it to the common man; getting onions when onions are becoming expensive by importing them from different parts [of the world]; working with the states so that the hoarders who are sitting over stockpiles of pulses release them; opening up the import doorways for getting the imports without duties for urad dal, moong dal and so on; importing edible oil.
Would you think, Reserve Bank of India, through its monetary policy, would take an accommodative stance if they were worried about inflation? Understandably it wants to help this economy grow, but if inflation was such a threat, do you think it would have kept its stance accommodative?
Three related issues; a recent paper that came out highlighted the issue of inequality; the Congress manifesto also talks about this, and Rahul Gandhi’s followed this up with comments about redistribution of wealth. What are your views on these?
The Congress party should be guided by the so many economists who guide us, meaning they sit along with the Congressmen and keep guiding us. I listen to their guidance. How can he be talking about redistribution of wealth? Let him just try it out within his party.
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Will people who have made wealth, genuinely — I don’t want to distrust or mistrust anybody — with their enterprise, with their talent, with their skill, either as exporters, importers, traders, businessmen, manufacturers…; can we ask them to redistribute it? Is that possible?
Is wealth redistribution a solution or wealth creation a solution? This is a typical socialist attitude. This is absolutely about ripping off the rich, paying the poor, and throwing cash at [the issue of] poverty.. And you want to claim that you’ve been a Good Samaritan. Poverty doesn’t get alleviated by throwing money at it You have to understand how poverty works. Denial of opportunity is poverty. Denial of skills is poverty. Denial of medical facilities is poverty.
Give them ₹1 lakh each a year. You think it’s going to solve the problem? They’ve been languishing without their houses. They’ve been in smoke-filled kitchens. They didn’t even have drinking water. They had to walk miles with whatever the pots on their head. Is that the way in which you want to address poverty? So his (Rahul Gandhi’s) approach itself is very worrying. And I’m sure many of those economists who are sitting with him must be shivering in their shoes if he’s going to be starting redistribution.
About inequality, nobody wants any society to suffer because of inequality. But how do you redress it? What are the items of inequality? And that’s why I highlighted it. Lack of opportunity is inequality to me.
Moving on to the issue of electoral bonds, both the PM and the home minister commented on it and said scrapping it was a mistake because it brought in some level of transparency. Is the government looking at seeking a review (from the court) or tweaking the scheme if/when it comes back to power?
Whether we go back for a review or not is to be seen, but we still have to do a lot of consultation with stakeholders and see what is it that we have to do to make or bring in a framework which will be acceptable to all , primarily retain the level of transparency and completely remove the possibility of black money entering into this. What the current scheme which has been just thrown out by the Supreme Court brought in was transparency.
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What prevailed earlier was just free-for-all.
You could walk around with bags, suitcases, gold or paper for a flat or a property or a sack full of cash with no one asking the question as to where that money came from.
Of course there was this element of confidentiality but that was made as a part of the electoral bonds which came out of a parliamentary act. The whole scheme was approved in Parliament. So those who are now speaking about confidentiality, they knew it all. It was passed in the Parliament and you benefitted from it, you’ve also got the money through the bond. Suddenly you’re now playing as though you didn’t know that those who were giving money wanted the confidentiality. So I find it outrageous that sheer opportunism is making political parties point a finger at BJP, but they have taken the money also through the bonds.
But there are some aspects that have been highlighted which clearly suggest avenues for improvement. Like for instance, we have all realised that shell companies have been giving . We have all realised that loss-making companies have been giving, and maybe those are areas that need to be improved.
Yes.
So we can expect them to be brought back in some form ?
Yes, after a good consultation.
The Opposition has raised a washing machine metaphor — that people being investigated by the Enforcement Directorate and CBI saw cases being closed after they joined your party.
The BJP can’t sit here and say, you come to my party today, and the case will be closed tomorrow. The case has to go through the courts that have to take a call; they will not just say, “Oh, he’s come to your party, close the case.” Doesn’t happen that way. So is this washing machine a term they want to use for the courts?
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The last five years have been pretty challenging because there was the pandemic and then you had the Ukraine war, now of course there is the West Asia crisis . You were in charge of the economy. We don’t know who the next finance minister is going to be. But since you are the current finance minister, if you were to just tell us what the next step for the economy is, what do you think needs to be done to keep this momentum going? Because India is are the fastest-growing major economy, but it needs to continue to grow fast. What do you think needs to be done?
Stability in policymaking. Simplification of the process of taxation. GST rate rationalisation. Making it easy for investments to come through into the country. And when I say that, it’s not just from the central government. It has to be state governments, it has to be local bodies bringing in compliances which are simpler at the local body level. I would think these are larger issues.
Newer and very, very significant areas of industry will have to be given a lot more policy support, whether it is renewable energy, whether it is handling the rare earths, whether it is India’s capability in terms of artificial intelligence with proper, soft touch regulation, making sure that scaling up includes a lot of these Industrial Revolution 4 techniques, making sure that people coming out of our medical institutions and engineering institutions have skill sets which make them ready for recruitment.
Is there a reason why so many ministers are contesting? Is it because of the 370 target?
No, it’s not because of 370. I think it was fair of the party to ask people to go to the ground, contest elections. It will bring in greater connect with everybody. In my case also, I was asked whether I want to contest from Tamil Nadu or Andhra.
Your comment about not having the money to contest elections caused a stir?
I was bantering with the moderator but this came from my heart. The fact remains that over and above whatever I may say , it’s the party which has to tell me what to do. I may say anything, but if the party still says “contest”, I will. Nobody in the BJP can put their foot down [and say no] because we are all well trained in that manner. So despite what I said, if the party had chosen to have me go and fight the elections, I would have definitely done so.