Mitul Paniker
Ahmedabad recently hosted the Gujarat Literature Festival, bringing esteemed authors and experts into the city. The annual festival saw participation by Mallika Sarabhai, Anjum Rajabali, Raghuveer Chaudhari, Jay Vasavada, and others. Also seen at the festival was noted economist Lord Meghnad Desai, who talked about the economy and its changes in the last 50 years. In an interview with Asian Voice, Lord Desai discussed 'Make in India', the Modi government and China's currency devaluation.
What is your take on the raving “Make in India programme.” How beneficial do you think it will be?
See, Make in India is a straightforward idea. If you're going to get FDI in manufacturing, what you want to tell the people coming in is, don't come to India just to sell to Indians. Come to India and use India as a platform for exporting. That is what Make in India means, according to me. So far, we have gathered big investments. It will come either in defence productions, locomotives or any other sector. These things take time. The basic idea is to convert the FDI into different sectors.
You have given off an impression of rather leaning towards the Modi government. How effective will his policies be in the future?
In terms of ideas and economic philosophies, BJP and Congress have the same moderate, middle-of-the-road khichdi. Modi is not going to dismantle any institutions of the Indian economy. Public sector enterprises will remain the same. He just wants to improve their performance, not privatise it. Modi's difference would be that he is more decisive than the UPA government and Manmohan Singh. He may get better results than the UPA did. The quarrel is essentially not about the economy, it is about cows and culture, which is a different story. The economy has no difference with the shift in power. Politics is the art of making those people vote for you, who would not normally vote for you. Modi did that in 2014.
How will China's currency devaluation affect us?
China is in real trouble. China was going to liberalise and allow more exports and capital. What happened is, they could not control the whole process. They don't know how to run the stock market. They had three major collapses. What are these people doing? You can't actually become reserve currency. The global economy would suffer with that. The world faces with big danger with another financial crash. What people have done is lower interest rates, there are no real investments. Just a lot of speculation, buying back of shares, start-ups, paying over the top for start ups. I've been saying for a while that the interest rates are too low. China's instability is a syndrome of how a country with no experience of the stock market always begins with treating it like a casino.
