February 23, 2019

Addressing the Economic Times Global Business Summit #ETGBS

Thank you Kabirji. Thank you Bodhi. Ladies and gentlemen. It is always very difficult to hold the attention of the audience so soon after the Prime Minister has given a very holistic view about the working of this government over the last 5 years. He has addressed the change that we were able to bring about in the working of Indian government over the last 5 years. I think he brought about the perspective of how things used to be done earlier, what was the way this government brought about a change. And I think that, in some sense, can be best understood in terms of the change of the mindset of the nation.

I am often asked what do you think is the single most important achievement of this government, and I dare say, it is the change in the mindset of 130 crore Indians. Many of us are used to the jugadu approach. We can manage anything and everything. “Sub Kuch Chalta Hai”. There were times when I just became the Railway Minister, about 18 months ago. On one occasion when I was trying to drive in a lot of rapid change and in that process was also a little critical of some of the things that were happening, one of the officers turned around and told me sir you will have to appreciate irrespective of who the Minister is or whether any of us does our work or do not do our work, 12000 trains leave every morning and they reach the destination. Now that can be a great complacency that can be a great attitude for some but not for Prime Minister Modi and his team. And I think over the last 5 years that change in mindset has been probably the most challenging part of government. And I may dare say 5 years into government, the most satisfying part of our achievements.

Today, we have a nation of a billion-plus people aspiring for a better quality of life and expecting those game-changing, those transformational outcomes and you only expect something from a person you believe who can deliver. I mean I would expect a good editorial because I know Bodi can write a good editorial and, therefore, the morning preferred paper is going to be an Economic Times to know what’s happening in the business world. And, of course, now with the successful political pages, you can probably read the Economic Times and know exactly what’s happening all across the world today.

But I do that, I read that because I know he can deliver. If I didn’t trust his ability, the ability of The Economic Times team to give me good news, good in the sense give me complete news, smartly that would not be my preferred paper. In the same way, if there is high aspiration, there is high demands on Prime Minister Modi and his government, I think it’s a matter of great satisfaction for all of us because the people of India trust we can deliver.

And if you see the way this government has taken up different projects for the last 5 years, there is a method to the projects that have been taken up. I remember a lot of criticism coming our way when we took up the Swachh Bharat mission, the clean India mission, right in the first few months of this government. And a lot of critics who said that Prime Minister is not expected to address cleanliness from the ramparts of the Red Fort when he is giving his Independence Day address. But as I look back, four and a half years later, I realise that behind this programme there was a huge outcome that he could foresee, an outcome on healthcare for example, an outcome of the thinking of our people, an outcome, possibly, also impacting corruption levels. You are in a clean environment, you think differently, an outcome which will have deep impact on tourism potential of India, for example, and then correspondingly on the economy.

So an investment in a cleaner India is economically a sound investment was very much at the back of his mind and then you look at the various projects that came one after the other, be it Saubhagya, our effort to ensure that every single willing consumer in this country, every household wants an electricity connection business, of course, included, should get electricity at the drop of a hat. And after all, on the ease of doing business rankings, I think electricity was one of the first large movements why India just leapfrogged in the world rankings.

Cooking gas – the impact that cooking on wooden stoves or kerosene was having on our women’s lives, particularly in rural India, could only have been appreciated by someone who has lived that life. Most of us in this room, including me, possibly have not lived the life where there was no electricity or our mothers or sisters were cooking on a stove under wood or with kerosene. Many of us here would not, probably, appreciate that when he launches Ayushman Bharat giving 500 million people, 50 crore of the lesser privileged sections of society free healthcare, what a deep impact it is going to have in our productivity, the outcomes it will have on the cost that the nation pays for bad health, the outcome it will have on the social side in terms of better family life, in terms of better quality of life for our people, the outcomes it would have in terms of saving lakhs of families, maybe millions of families, who would probably getting into poverty in the process of trying to save or improve the health of one member of the family, given high healthcare costs.

And I think all these projects when you look at them, they reflect two very important aspects of Mr Modi’s thinking. It’s compassion and that empathy, that compassion probably came out of his own early life experiences where he had to probably sell tea to passengers on the railway station or in the train. Where he went to a school, which did not have great facilities, which did not have equal opportunity for people of all sections of society, where at home he would have to study under a kerosene lamp or under a streetlight, where his mother would cook on an antiquated wooden stove, maybe smoking in 400 cigarettes and the rest of the family also. Children in the room in that small room in thatched hut.

Now all of these have probably defined his thinking, his compassion towards a section of society, which has very often not figured in our horizon of thinking, of the policymakers, planners, business world. And the second is passion. The passion with which he takes up these projects, the passion with which he works through these initiatives. He guides them, motivates us to achieve sometimes very daunting targets and this compassion and passion has led to these various initiatives be it the effort to reach Digital India to the remotest corners of the country, be it the effort to understand what Artificial Intelligence can do to help us improve the security situation in the country, to help us improve healthcare delivery in the country, provide wellness the people, how artificial intelligence can impact the railway’s working, for example.

So, he is a person, a man in a hurry, runs a government in a hurry, a hurry to deliver good governance to the people of India and opening of opportunities for the business world, both Indian and international, to come to India, to Make in India, to engage with over a 130 crore Indians aspiring for a better future for themselves and their children, a country willing to engage, both on the one hand with the challenge of terrorism, on the other hand with the challenge of climate change with passion and with compassion.

And to my mind, the 130 crore Indian population, the 1.3 billion people of India provide the greatest opportunity and unparalleled opportunity for businesses both in India and around the world to come to India, to look at how economies of scale can help you meet the aspirations of a billion-plus people, to see how modern technology can be leveraged and brought to India at scale using Indian skilled manpower, using people looking for a better quality of life for ease of living, bringing the best technologies to India, produce in India, serve India in a cost-effective manner. And all of this makes good economic sense.

And no better programme than my own LED programme to show that how a country can invest less than 2 billion dollars, replace the lighting across the country, both in homes and industry in infrastructure projects in huge state utilities, in offices, replace 1.4 billion incandescent bulbs with an nearly 10x more efficient LED bulb, save the people of India 7 billion dollars every year, year on year with an investment as small as 2 billion dollars, reduce carbon emissions by 80 million tonnes every year, bring down your peak load requirement by 20 gigawatt. Thereby serving the people of India with more efficiency, smartly, economically far-far more wisely, and to my mind, each and every one of the projects that this government has taken up when benchmarked both on the immediate gains, the life cycle costs, the impact both social and economic, I am not even getting into the political impact of it. I believe you have seen 5 years where good governance and development has become an instrument of service. Economics and politics have both intermingled smartly, so that good economics has also made for good politics. And that’s the change in mindset that I think we have navigated over four and a half/five years.

The report card is before the people of India and we are now getting into the most important examination of a government’s life. We do hope what I had mentioned in the Economic Times Awards ceremony as the initial findings will get better as the days go forward. Our first poll had indicated a 297 to 303 kind of range at which the Bharatiya Janata Party would secure seats and about 360 to 365 as the National Democratic Alliance, given the developments of the last few weeks where the NDA, the National Democratic Alliance has expanded its footprint in newer areas. We have now an alliance in Tamil Nadu, which sends 39 Members of Parliament and Puducherry, 40 together. We have increased our presence in the Northeast significantly, so we are looking at a full sweep all across North East. We are looking at huge returns in states like West Bengal and Odisha in terms of expanding our footprint.

Given the political developments of the last few weeks, we are now confident of not only retaining the 73 seats in Uttar Pradesh, but now we have a target of 74. No second guess is required for which that 74th seat is that we are targeting to win. And my own sense is, the tracking poll is going on so maybe one of these days I will share it with you, but my own sense is the people of India are looking to give Mr. Modi another term of a strong, stable, decisive government, a government that brings in a stable, simple, predictable, regulatory and policy regime in the country, a government that has changed the mindset to an honest country, recognised as such by the world today which is why today the world wants to engage with India and I hope what Vineet said in the morning the Davos of the East becomes as we go forward the next Davos itself. Thank you very much.

  1. Thank you Piyush for that very comprehensive address. Thanks also for the nice words about the Economic Times, particularly with my boss present in the audience. So, I will ask you a few questions and maybe you can take a couple of questions from the audience also. You have given me an obvious opening question that you seem to be very confident about the elections – 300 plus, which, I mean in private not many people of your own party or outside seem to be that confident?
  2. First of all they are not privy to a lot of the information that I am privy to, because the surveys that we are carrying out across the country is not a public document. It is a totally third-party initiative where we don’t mix politics and if too many people know about all of this there are two risks: a) the survey results get manipulated or sullied and b) the risk of complacency. So, we certainly don’t want anybody to start knowing that his seat is safe and his seat is good. I would rather have all my candidates and all my leaders on edge so that they put in their best foot forward.

But I will tell you why I feel confident. It’s very difficult sitting in this room, as I said earlier, to really understand the deep impact these programmes have had to the last man at the bottom of the pyramid. People today are willing to move out of the traditional caste and religion and community-based voting patterns and looking at change in their own states. In Tamil Nadu, I have been engaged a lot in the Tamil Nadu election. My survey results have surprised me. Now, I should have actually been able to bargain a far better deal but again because of this mindset and legacy issue, it’s possibly not easy this time around. But truly the impact that Mr Modi has had in a state like Tamil Nadu, where it was assumed that the Dravidian politics will always prevail and India will never move beyond that, we are seeing some surprising results when it comes to Mr Modi’s popularity and the impact his programmes have had on the ground.

So, I personally believe it is the people in the villages, in the slums, at the bottom of the pyramid who have felt the impact of this the maximum. The vocal societies who meet editors of Economic Times and to the extent to which your teams can reach out to, is a section which may at times be a little disappointed also, because in some sense, when a  country moves its tax to GDP ratio by 20% from nearly ten/ten and a quarter per cent to twelve/twelve and a quarter per cent, it’s not a mean achievement. It really clearly means that the tax base has expanded, tax compliances are becoming better and to the credit of honorable Finance Minister Mr Jaitley, it’s been 5 years of good prudent economic management that has helped India reach where we are today, both on economic fundamentals and the social benefits reaching the last man at the bottom of the pyramid. This kind of a  combination India and Indians have craved to see for years and years, and that’s what empowers and strengthens my conviction that this government is going to be re-elected with an even better result than last time.

  1. 74 seats in UP?
  2. I don’t know whether you have noticed our last campaign ‘Na Mumkin Nahi Mumkin hai’. Did he say it? Ok. So for us, tell me did you ever imagine we would get 73 in the first place last time around? You didn’t. Did you ever imagine that in the assembly elections, which was 3 years after the government had come in, three years after 2014 nearly, did you imagine us getting 325 seats? A feat which has never happened in independent India. Uttar Pradesh, with all its diversities, giving 80% of the seats to a single party has never ever happened in the history of independent India. Tripura – we had a 1% vote share in Tripura, 1% in 2014 with all of my Mr Modi’s popularity. We won the assembly with 51% vote share.

So, for you, it may be very difficult to imagine that West Bengal is going to give us a huge victory, very difficult for you to imagine. But it is possible, because when the mood turns, it turns very swiftly and the people are seeing the fruits of development that other parts of India are getting and they are seeing that why my state is not, for example, engaging with Ayushman Bharat? Why is the state government keeping me deprived of healthcare?

  1. About Mamta’s withdrawal from Ayushman Bharat?
  2. So, I think the sense on the ground, the development, we just launched the Vande Bharat Express. Now, it’s very easy to deride the success of Make in India, but I personally believe failure helps me to better myself every time. So if I had a glitch on its return journey, which was not a commercial journey, just an empty train, some journalists did hop on to it, so they got privy to it. But I think that’s great that in a test run like that or a return journey, empty, non-commercial journey I can understand what needs to be done better. I can understand do I need to improve my battery power? Do I need to take care of cattle run-overs which is a problem that the Railways faces? And this being a train set, a new modern technology, it’s not really planned or prepared for cattle run-overs.

So, all of these are learnings which I am happy to learn from. I would not deride the talent of my engineers. So I had, in fact, once asked this of a journalist that if you write one wrong piece or you make one mistake in your editorial or in your piece in the newspaper, does you editor sack you or does he counsel you? But, of course, sometimes one can see a campaign, so if I keep making mistakes every day, then certainly you will have to be concerned.

  1. Let me just shift to business. I mean, undoubtedly, some of the achievements of the Modi Government have been remarkable, cleanliness is I think part of the national consciousness, so is Ayushman Bharat appears to be a game-changer in its early days, the electrification programme has attracted worldwide attention, so those things cannot be denied. But in one aspect, if you look at the stance of Bharatiya Janata Party over the years, it has generally been regarded as a party which is most sympathetic perhaps to the private sector and private Indian companies and having in that sense a more pro-market kind of a leaning than, you know, the Congress, if you look at the Vajpayee government, for instance. So these five years have been marked by a lack of private sector investment, why do you think that is the case and how can you bring it back?
  2. The only thing that comes to mind is that old ‘Elementary, My Dear Watson’ that’s the only answer I can give to you. The BJP has always believed in the integrity of processes and good governance. That’s been our first and foremost credo as a party. The Jan Sangh was initiated and started to bring about honesty and good governance in this country. Prime Minister Modi’s following that rich tradition set by our stalwarts, be it Deendayal Upadhyay, be it all the people who over the years nurtured my party, be it Mr Vajpayee’s government and the leadership of Prime Minister Modi, point 1. Point 2, we have never ever tried to support the private sector to do wrong and our effort to clean up the system has had its pain points, undoubtedly.

Now, we did not tell our bankers or we did not do phone banking and tell our bankers to give indiscriminate loans to projects which never saw the light of day. You saw the situation between 2008 to 2014, in 6 years, and ladies and gentlemen, you will all appreciate, in 6 years, the public sector banks literally tripling their loan book from 18 lakh crores to 52 lakh crores. There is something fishy in that. I mean you can’t have a steel plant being set up with the loan of 5 or 6 billion dollars from the banking system and when you try and assess what the worth of that plant is you are not able to come to 2 billion dollars.

You can’t have power plants being set up a dime a dozen all over the country without true assessment of the demand. You can’t have, for example, infrastructure projects coming up at hugely inflated prices. And we have some bankers in the room here, they will the recall the pressures that were being faced to just keep indiscriminately lending. Now, artificially, that can have a short-term impact on growth. So if we were to tell our banks, now you increase that  52 lakhs to a 100 lakh crores, or double the book in the next five years, artificially that growth or the private sector investment will look really fascinating.

But is it really the need of the hour? Do we need to invest more in power plants of the traditional genre? I think all of these are issues the country has now come to start facing the reality about. We have come to realise that there was a lot of padding happening, which we have stopped. We have come to realise that there were big borrowers who borrowed indiscriminately on a very low capital base and which is today coming home to roost. You saw the layering of companies in ILFS. You saw how many promoters had no skin in the game, but setup large projects because they got a coal mine illegitimately, which the Supreme Court then had cancel and we felt the tremors of the impact on the private sector because of that.

Now, all of these things the country had to someday bite the bullet. And I think no better time than a leadership like Prime Minister Modi to bite the bullet, to change the way this country and its business works, to encourage honest business to prosper and flourish and make even those who may be large big names pay for the loans that they have taken, be responsible borrowers and be liable to pay back to the banking system, which is, after all, public deposits. It is the people of India’s money that has got squandered away under the previous government, which we are trying to bring back to the system.

Now that pain point if it has hurt some I think the nation will forever be grateful to Prime Minister Modi for changing the needle from dishonest banking to honest banking, from changing the needle from dishonest governments to honest governance, changing the needle from capacities being indiscriminately created to capacities being prudently created, changing the needle from high-cost, high-inflation economy to an economy which is focused on controlling inflation, focused on making the life of our common citizens better, focussed on last-mile delivery of government projects honestly, so that every single rupee government spends reaches the beneficiary and has not got swindled along the way.

And I think that change is well worth a little bit of private sector pain, not to say that the private sector has always covered itself with glory, be it the banking sector, be it any sector, power sector, we have more than enough examples of bad governance and bad practices in the private sector. So, if I may borrow a phrase which I used to very often say before I came into government in the 2010 to 2014 period, I’d just became a Member of Parliament, just started engaging with government and how governments work, became the party spokesperson, very often on your channels and your news media I have used the phrase – ‘it is not important who owns an enterprise, ownership doesn’t define success. It’s vision and leadership that defines the success of any organisation.’ And I think it applies to government. It applies to government-owned PSUs. It applies to the private sector. It applies to a media house. It’s not the ownership that will determine the success of any business, any enterprise, any organisation. It’s only vision and leadership and that is what we have provided, that is what we have worked towards in the last 5 years, the vision of Prime Minister Modi and the decisive strong leadership that he gave that has really changed the way India works and thinks.

We have enough media with predefined prejudices in this country and I can tell you I dare say one person in this room other than Vineet Jain, of course, who can stand up and vouch that Indian media is not partisan, more often than not, doesn’t have preconceived prejudices and doesn’t colour its reporting with their own thinking. Indian media also needs to I think evolve into far more news rather than their own views. This certainly didn’t leave the audience speechless.

Q: So you have talked about the development narratives which work in favour of, you know, resounding return to power after 5 years. Two narratives which are said to be working against you, is the agrarian distress, and also this whole issue of whether or not the whole statistical debate, but there is some perception that not enough jobs are being created?

  1. Well, as regards the agrarian crisis that you alluded to, one of the focus areas of this government has been to keep prices low to bring inflation down and if you will see you can talk to your wife or any of the persons here who are engaged with industry will tell you that this has being probably the lowest inflation in the last 5 years that the country has ever witnessed since Independence. I don’t know if you recall in the 70s we had inflation as high as 34% in September 1974, and we are down to 2.05% last month. Food inflation at probably zero.

So, over the five years, we have consistently focused on keeping inflation down. Also, we have tried to make our farmers produce more, improve the productivity of our farmers. So today, we can proudly say, that we produce all the requirements of this country. Our import dependences come to nearly zero as against when we came into government in 2014, the prices of pulses went up as high as 260 rupees and I still remember in cabinet our discussions where we can get pulses from quickly, where we can get oil seeds from quickly, so that we can bring down prices. We actually had Ministers rushing to different parts of the world to countries like Mozambique and what not, to try and get produce into India and maintain price levels and maintain the housewives’ budget at reasonable levels.

From there, we did a root cause analysis where the problem was. We prioritised what the farmer needs. We stopped all the illegitimate shifting of fertiliser instead of going to the farmer going to chemical plants. Fertilizer is highly subsidized. You remember how many agitations used to take place all over the country, highways were blocked because fertilizer was there but instead of going to the farmers went to chemical factories and there were politicians involved in that also. There are cases in courts where politicians’ families have to answer for diversion of fertilizer into industry and we had a solution. It’s not as if the solutions were not there. Prior to 2014, neem coating of urea had started, but the then government was restricting neem coating. They were saying you can only coat so much of the fertilizers. It beats my understanding that a good solution to a problem you are restricting. You had for the sugar industry higher output of ethanol, which would reduce our import dependence, save precious foreign exchange, improve the environment, because it’s less polluting than petrol, but you were restricting the use of ethanol and mixing it with petrol.

This government changed that. We said we will do 100% neem coating of fertilizers, never had one agitation for fertilizers and as Railway Minister I also monitored that no part of the country ever has a fertilizer shortage. We ensured availability of seeds. We did projects across the country, I think you also are aware of what happened in, let’s take Maharashtra. 70,000 crores, the previous Congress-NCP government in Maharashtra had invested over 15 years, not one hectare of land got irrigated. Devendra Fadnavis is, of course, trying to redeem those investments in infrastructure by doing the last mile investment, getting some of them off the ground, but he is also doing innovative solutions where we are bringing in Jalyukt Shivar, making small ponds at the village level.

And I think somewhere Times Foundation also has had some role to play in that. Small ponds, making the village and the farmer self-sufficient at the base. We don’t need to always have 100 billion and 50 billion dollar projects to solve the country’s problems. Sometimes, it’s the low cost, elementary solutions which matter more. In the process, what has happened is the farmer’s produce has gone up, his productivity has gone up, prices have been kept low and has certainly had some impact on that low prices on his ability to earn more.

We are committed to doubling the farmers’ income. We have brought in MSP for all the 22 main crops of the country. We have now brought in Pradhan Mantri Kisan Samman Nidhi, the PM-Kisan Yojana, which will get launched tomorrow at Gorakhpur and then in the rest of the country. Simultaneously, we are launching the PM-Kisan Yojana, 12 crore-plus small landholders and we are all aware division of land over the generations has left our farmers with unviable and small land holdings, so we are giving them a token of appreciation of a nation, which appreciates that they made us self-sufficient in food grains requirement, helped food security of this country.

This grateful nation is giving a small token of appreciation to our farmers. But for those of us in this room, very difficult to imagine that it may look small to us, but for that small farmer tilling half of an acre, one acre, one and a half acre, 6000 rupees every year is quite a large support that will help him probably buy seeds at the right time, maybe pay for his child’s tuition fee at the right time, healthcare and all almost being free now, may help him pay up the interest on his bank loans so that it gets regularised and he can draw further on it. We have increased that from 1,00,000 to 1,60,000 now for the farmer also.

So, it has been a holistic plan and a very focused approach, effort after effort to ensure that the farmer has a better future. They understand it. Sometimes, it is difficult for us in our limited horizon to be able to appreciate the impact that the Modi government’s philosophy and policies over five years have had on the common farmer’s life. I know my time is up, but I will just allude to a small example of the Indian Railways, since you also talked about statistics.

In the Indian Railways, every time I went outside people would say trains are always late but when I did my reviews in the office my people would show me statistics which showed I am 85-90% on time. Why the hell are people cribbing? And this was a dilemma that was bothering me. We decided to change the way we capture data. We put logging devices, data loggers at all the interchange points across the Indian Railways. In the initial phase, only 96 data loggers did not cost even a crore rupees. 96 data loggers at all the interchanging points. So over 40-50 km across the railways there was a data logger, so all the station masters on the route in between knew that even if they fudge the data barely 20 km after that the data logger will give out the right data and the guy would be in serious trouble and most people who work with me know they cannot mess around too in my Ministry at least.

So, everybody got the pressure of trying to put in the right data. You won’t believe if we switched on these data loggers on 1st April 2018, the punctuality numbers that I would get fell from 31st March to 1st April in one day by 20%.

You go to a doctor and you don’t tell him what your problem is, instead of a heart ailment he will land up replacing your knee, and with a knee implant, which would in the earlier days cost five times than what it costs today. So, we as doctors we need to know the problem, as business managers we all need to know the problem. Vineet needs to know that the ad revenue is correctly reflected, if you fudge the ad revenue figures you may see a balance sheet which shows a huge debtor of receivables on the advertising side. But then after 5 years you will realise the money is never going to come in.

So, the same way we needed to know what the real problem was. We got cracking, from June to end of July, 2 months, I personally reviewed every single zone and my reviews are terrible, by the way, my officers will vouch for that and I think some people have even criticized me, some very senior journalists have written articles complaining that all the bureaucracy is very unhappy with my style of working, but those reviews gave results. We went into micro details of what can be done to improve the punctuality and I am happy to report to you as the masters of my government that we have reached back to the punctuality percentages that we were before 31st March on the aggregate, but if you look at the number of minutes lost, in the railways the best punctuality barometer is number of trains that are delayed and multiplied by the minutes by which it is late. Bodhi, you will be happy to know we are down to one-third of what it was 7 months ago. Because we had a focused approach, we had the right data to work on, on which we could do the surgical strike.

Thanks a lot.

Next Speech

February 22, 2019 Speaking at a Press Conference in Bengaluru

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