‘I am not a Luddite trying to stop economic growth, I am a Gandhian’

‘I am not a Luddite trying to stop economic growth, I am a Gandhian’

Mani Shankar Aiyar, a former career diplomat and close friend of former Prime Minister Rajiv Gandhi, is outspoken and thus controversial. More recently, as cabinet minister of panchayati raj, youth affairs, sports and development of North Eastern region, he has been at odds with some of his senior colleagues, both within the party and the cabinet.

In an interview with Mint, Aiyar looks back and argues that the United Progressive Alliance, which is facing a political crisis, has an impressive track record. Edited excerpts:

The Nyaya Panchayat Bill floated by your ministry last year seems to have hit a roadblock. There was a clash with a similar bill proposed by the law ministry. What is the problem there?

There is no problem. The minister of law prepared a proposal for a Gram Nyayalaya Bill last year, which is a kind of mobile circuit court, essentially meant to be the first tier of the formal judicial system. Our idea, the Nyaya Panchayat, is an alternate dispute resolution mechanism at the grass roots.

The proposal of (law minister) Mr Bhardwaj was first rejected by the cabinet and we continued our work. But, just about the time that we concluded our work, his proposal was brought back before the cabinet and approved. So the bill prepared by us required adjustments.

We have sent the Bill back to the Upendra Baxi Committee that originally drafted the document, for redrafting. As soon as he is able to give that back to us we will be able to take it up again.

The Nyaya Panchayats, in association with the Gram Nyayalayas, will be an alternate dispute settlement mechanism as well as a formal dispute settlement mechanism at the grass-roots level, instead of people having to go as far as the sessions courts to begin the process of legal redress.

And sports, is also under your charge. There is a demand for a lot more money for sportspersons’ medals, for instance, than you are ready to give…

Every time Mr (Suresh) Kalmadi (chairman, bid committee for the Commonwealth Games 2010) picks up a pen, his demand for money goes up by several hundreds of crore. We have got an expert committee under S. Shankar Menon, the former additional chief secretary of Maharashtra, to advise the ministry on proposals.

And, compared to Mr Kalmadi’s ambition, a relatively small amount of money, but compared to my intentions, a relatively large sum of money, has already been allocated for this purpose. For the rest we’ll see.

We have held very, very detailed consultations with the National Sports Federation before determining as a ministry what is reasonable for this purpose. Mr Kalmadi has held his own consultations with the (National Sports) Federation and come to his own conclusions about what is reasonable. The gap between the two is very, very large.

The organizing committee (for the games) has formally written to us to say that they will not extend their cooperation to the Shankar Menon committee.

I say that they should never have been asked to extend their cooperation to that committee. The Menon committee is supposed to internally advise us.

So, they will advise us and we will take expert opinion on proposals that come before us before we recommended anything to other authorities or sanction it ourselves. It depends on what the proposals are.

But you are always in the eye of such storms.

That’s largely because of you lot, who never know how to quote me properly and are always looking for controversy. Your line of business is engaged in stirring up controversies. I have a more constructive job to do so I don’t seek any controversy.

But your troubles began this year when you said the government needs a mid-course correction. Do you still feel that way?

I said a course correction at this mid-point, which is different from a ‘mid-course correction’.

Any intelligent government is introspecting at all times and seeing whether things can be changed. The current position is that we have had a remarkable achievement in accelerated growth. In the last three-four years, largely on account of the excellent economic governance provided by the UPA government compared to the bumbling of the NDA government, we have succeeded in sustaining a much higher rate of growth and now we actually appear set to break that double -digit barrier.

I welcome this accelerated growth and I would certainly wish to give credit to the economic reform process for having enabled us to breach that double-digit barrier. But, during the very same period that our economic growth has touched the stratospheric limits, on the human development index we have risen from 127th to 126th position.

And the Arjun Sengupta committee report tells us that in this country, growing at 10%, with the fourth largest number of dollar-billionaires and eighth largest number of dollar millionaires, there are 836 million Indians living on less than Rs20 a day.

Therefore, we need inclusive growth.

Accelerated growth is the necessary pre-condition for inclusive growth because you cannot distribute poverty. But since we are now generating so much prosperity, with such a large proportion of it is going to such a small slice of Indian society, we have to see how accelerated growth can actually become inclusive growth, which is the stated objective of the 11th Five-Year Plan.

How do you propose this can be done?

Fortunately we have the institutions to enable us to translate accelerated growth into inclusive growth.

Those are the institutions of Panchayati Raj and the elected urban bodies. If you put these together, you find approximately 2.5 lakh units of local self-government in every nook and corner of India.

I believe that if we sincerely implement the Constitution, I am not even talking about a new law, through this large proportion of our population represented in institutions of self-government, we would ensure participatory development and democracy.

We need to empower local self-government, as we are inadequately using these institutions for translating accelerated growth into inclusive growth.

So you were not speaking against growth at all?

My plea is not to reverse growth, it is not to stop accelerated growth. But, let us not be mesmerized by accelerated growth. We need to make it a more equitable form of growth.

Growth in the 1980s averaged 5.6%, when agricultural production registered an annual average growth of 5.7%. In the 80s, oilseeds production went from 9mt to 18mt, thereby converting this economy, by 1990, into a net exporter of certain varieties of edible oil. And we’re now back to being partly globally dependent. This is because rain-fed agriculture, which was receiving top class attention even up to the 8th Five-Year Plan, has suffered from acute neglect in the 9th and 10th Plan, though now there is some attempt at a recovery. There has been a sharp fall in public investment in agriculture.

There has (also) been a huge reduction in employment in the handloom sector, which is the biggest non-farm employer. We have had a massive expansion of the unorganized sector of our economy…

But isn’t that a part of your government’s strategy on labour…

And the labour reform, which says that we should increase the number of those in the unorganized sector by reducing support to those in the organized sector, and which dismisses the organized workers as a privileged class, to them I quote one figure, given to me by (commentator and journalist) P. Sainath: Paul Krugman said in a recent column on the American economy that the ratio between the highest corporate earning and the lowest wage paid by the same corporate in the same sector had crossed the 1000 to 1 ratio. Krugman said that at this point, democracy is seriously threatened. In India, according to Sainath’s calculations...that ratio has extended to 32,000 to 1.

And the “1" there, is the organized labour, so can you imagine what the ratio is between the highest paid corporate and the unorganized labour?

I am in favour of accelerated growth. I accept that it is economic reforms which is leading to this economic growth. I am not a Luddite trying to stop economic growth, I am a Gandhian saying that eradication of poverty should be a higher priority for us than the promotion of the prosperity of the prosperous.

Is that such a radical thing to ask? Is that something against the Congress tradition?

You tell me, is it?

Well, it’s not.

I may be a Marxist but so was Nehru. But why am I a Marxist? It is because particularly in the conditions that obtain, I see that the relationship with the means of production has such a major impact upon every aspect of the life of the individual. And therefore, I do not think that we can ignore the needs of the rest of us, while some of us benefit from this accelerated growth.

Will the North-East region benefit from the high growth rate?

Just as I oppose the view that growth by and in itself is adequate, I disagree with the view that the North-East is isolated from what is going on in the economy.

The truth is that there has never been a proper, scientific approach to the development of this region, which we are trying to bring in. Otherwise, for every sector that may be considered obscure in many states, in the North-East you will find there are great strides being taken on exactly that front.

For instance in Nagaland there has been a 15% per annum growth in agriculture whereas the sector has grown by no more than 2.5% or so for the country as a whole.

Are industries showing interest in the North-East since the new industrial policy for the region was announced?

The new industrial policy came into effect on 1 April, but notification of the sections that relate to manufacturing were issued only in August, and that too after a great deal of pressure from our side.

Results will take time, but in terms of the concept, I think that nowhere else in the world have we succeeded in getting a package that gives tax breaks, links them to subsidies and provides them in an area rich in natural resources and human skills.

What else is being done to promote the region’s industrial potential?

We are going to do a North-East India investment opportunities event in Thailand in late September.

We have also told the CII, that we will participate in their event in New York only if they provide us a forum to talk about investment opportunities in the North-East.

The Russian ambassador went on a visit there in June, we had the Australian High Commissioner visit there and we’re trying to see whether we can promote some interest in both countries. I have had both the Malaysian and the Singapore missions come to me and state their interest as well. Over time, we might be able to generate some live investment interest.