FICCI, the High Commission of India and UKIBC organised a meeting with UK companies to meet with Indian Finance Minister Mr Arun Jaitley and his delegation from India on the evening of Friday 13th March at the Institute of Engineers in Westminster.
Panelists were Mr Rajan Bharti Mittal, Mrs Patricia Hewitt, Chair, UKIBC, the Indian High Commissioner, Mr Ranjan Mathai, Dr Jyotsna Suri, President FICCI, and Sir David Wright, Vice Chairman of Baclays Bank.
Mr Prashant Pise, Head of Chancery and Minister for Press and Information at the Indian High Commission, was in the audience along with Pratik Prattani, Director (UK), FICCI.
In the front row were Dr Virander Paul, Deputy High Commissioner for India, and the British Deputy High Commissioner to India Mr Kumar Iyer. Lord Diljeet Rana was spotted too.
Minister Jaitley said that if the process of India's economic liberalisation had started in the 1970s the course of history would perhaps have been different.
The growth rate, Mr Jaitley said, in the 60s and 70s touched only two to three per cent. “Economists the world over used to sarcastically refer to it as the “Hindu growth rate.” “Unemployment was high, inflation was high. But after the nineties, for almost four years in a row, we grew by nine per cent.
But somewhere we decided to blur our vision and go back to the politics of the 1970s...instead of concentrating on higher growth and more productivity.”
Mr Jaitley devoted much of the first part of his speech to the Land Acquisition Law. “I asked one of the senior most persons of the previous government, what persuaded them to bring changes to the Land Acquisition Law...why is it they brought in a law which made land availability for housing, for industry, for infrastructure almost impossible?”
The reply to his question, Mr Jaitley said, was that it was a way to win elections. But, he added, now Indian has changed, with an educated near 35% middle class, the poverty index had come down, India was more aspirational and wanting to grow, “so this populism itself was not sufficient.”
He said that there was still 65% Indians without adequate housing and low quality infrastructure. “You have a huge amount of infrastructure yet to take place. From hospital to graveyard you need land for every activity. And...you have a law which makes acquisition not just difficult but...impossible. I asked the framers of this law, do you seriously believe any piece of land can be acquired under this law? How then will India grow?” Mr Jaitley said this was why land was being acquired through malpractice.
Mr Jaitley turned to correspondence between the last PM and the then telecoms minister, and commented that it as likely that the previous PM knew that there was “foul play in this [previous] government.” He referred to a “sense of helplessness” in the previous regime that prevented a transparent market mechanism.
Then he turned to the topic of coal. “The former Prime Minister announced within two months of taking office that there would be an option on coal and till he relinquished office that option never happened. “In fact I am given to understand that the party in power used to issue chits and whoever got that slip for a collateral consideration got the land, got the mine.”
Turning to the Modi government, he said that it had added five to the existing 13 exemptions to the “ onerous procedure” of the Land Acquisition Law.
On the latest Budget, Mr Jaitley said he would have liked to spend more on irrigation but with the Land Law still in place it would be a futile exercise.
He referred to the knock on effect of industrial corridors in bringing growth to rural areas. “The entire rural area on both sides of the road gets developed. Their land values go up...each one of these exempted purposes is going to help rural India.
Discussing if Dr Manmohan Singh's talk on coal options had been walked, “the crisis he faces today would never have taken place...it is these changes and reforms that we have been making. But that challenge is those who want that obsolete process to continue. There is a raging battle between reform and obstruction. The seems to be a sadistic thrill in preventing so and so. But the government is determined. Do we waver, do we blink. And if we show any signs of blinking, the sadistic thrill reaches a higher level. The crisis Mr Modi faced a decade ago, he didn't blink and I am sure the government isn't going to blink. Most of the decisions don't require legislation, just executive decision making. The road map is we need a lot of investment in India, we therefore hold our doors wide open. We need to improve the credibility of the Indian economy. We are trying to get the world to show a lot more interest in the Indian economy.We are trying to rationalise and lower our taxes and have a non adversarial system. We hope to get to eight per cent growth next year.”
