History will judge India’s leadership favourably for the swift lockdown imposed in March as it saved lakhs of lives even though livelihoods suffered, says former Rajya Sabha MP and Fifteenth Finance Commission chairperson N.K. Singh. In his autobiography Portraits of Power released on Monday, Mr Singh, who served as secretary to the Prime Minister Atal Bihari Vajpayee, gives readers a ringside view of his brush with the inner workings of India’s political economy. Edited excerpts:
In your book, you blame migrants’ woes after the lockdown, partly on poor conduct from employers and corporate India, as well as State governments. Wouldn’t it have helped to have a little longer notice than a few hours for the lockdown?
I think the lockdown had to be taken with such alacrity and decisiveness that it did. And I think history will judge the leadership favourably, because our lockdown with 85% severity was the most effective lockdown.
When people analyse retrospectively why our first quarter GDP was negative 23.9%, they will also consider the severity of our lockdown which was more than many other countries with much less severe and draconian lockdowns. So it may not have been that it saved livelihoods, but it certainly saved lakhs of lives and enabled authorities to prepare for ramping up health infrastructure to deal with the pandemic.
Did corporate India fail migrants? Perhaps. Did urban India fail rural India? Perhaps. Did the employers fail their employees? Yes, by all means. Did some of the State governments not act with the necessary alacrity? Maybe. But the fact remains there were heart-rending scenes of migrants returning home. We hope that these will never be repeated. Going forward, there is a need for a National Commission on Migration as credible data about the phenomenon remains elusive as is the definition of who is a genuine migrant. The problems of migration may have abated for now, but remains a challenge.
You have written about a message you conveyed to Prime Minister Manmohan Singh, questioning the rationale of the retrospective taxation amendments moved by Finance Minister Pranab Mukherjee in the 2012-13 Budget. Now, the government is considering an appeal against Vodafone’s victory over that tax in international arbitration proceedings. What do you feel is the way forward?
Yes, Larry Summers had asked me to convey this message to PM Singh as a favour. ‘For a long time, you guys in India have said the country believes in the rule of law. I don’t think you believe in it… considering what you have done on retrospective taxation, this doesn’t measure up very well with the persistent assertion to investors.[ Mr. Summers said]’ So I did convey this to the PM. But Dr Manmohan Singh being Dr Manmohan Singh — an absolute conformist, in terms of rules, procedures, propriety and self-effacing characteristics — he asked me in return: “NK, you have also worked in the Finance Ministry for long. When a Finance Minister comes to you once, and you suggest to him that something should be reconsidered, he goes and rethinks and comes back holding on to his view, do you think it is proper for any Prime Minister to interfere in the decision which must be left to the Finance Minister?” This is what he told me and the taxation law was implemented.
The current state of play is the case is in judicial process. This has revenue and other implications… When this issue had come up in Parliament, I remember the Finance Minister had asked if the Parliament is sovereign and competent enough to enact laws and change them retrospectively. Of course, the answer is yes. The issue was not parliamentary competence, but the rationale for making this far-reaching amendment. On the future path, it is up to the government to decide. I am sure it is not merely this particular case and its resolution, but the broader principle and framework which should govern retrospective taxation.
You mention another time when PM Singh asked you why Biharis do well outside the State, but Bihar itself remains poor. With the State elections coming up, how do you view its challenges today?
In the last book I edited with London School of Economics’ Nicholas Stern, Towards a New Bihar, we had argued that the historical issue of Bihar has been the dynamic and the balance between identity politics and development politics. Society has remained far too long as a stratified social order, it is only development that can make that order more malleable. Therefore, it would be the hope of every Bihari, that whatever the outcome of the forthcoming election, development should trump identity politics. I cannot wish away the fact that identity politics, in terms of class, caste and other fragmentation, exists. I very much hope that development will prevail because till that happens, society will remain stratified and horizontal; vertical mobility remains restricted.
One of the malaise of the State’s economy has been that private investment remains shy. I don’t believe in the dominant philosophy there of enhancing public outlay in the belief that private capital will ride on its back. This view needs to be significantly modified… It is only synergy between public outlay and private capital that can guarantee long term growth. Whatever government comes to power, I hope they can get more private investment into Bihar. Look at the migratory patterns. Maximum outward migration is from Bihar and parts of U.P. The State’s migratory issues need an analysis both on social and economic factors.
When Dr Manmohan Singh asked me: ‘How is it that Biharis when they go outside the State, achieve spectacular success in every walk of life, but Bihar remains poor.’ Then he laughed and said, India can never prosper till Bihar prospers. Later, for a particular year, Bihar’s growth was significantly higher than India’s growth rate. I told him then: ‘Now, Sir, India cannot prosper till it grows as fast as Bihar has been growing for the last three years.’ He laughed. The message was not lost on him or me. – The Hindu