April 5, 2019

Speaking at CII Annual Session, India 5.0 : India@75 and Beyond’, in New Delhi

Welcome to what we would like to believe there is going to be a simulating session for all of us. You know, for many of us who have known Piyushji over the years much before, also his moving into mainstream politics. I think it’s a matter of great pride to know somebody who is virtually today become a national crisis manager. I mean, I remember 2014 June or July … because in the deep end, all the Power and Coal which was in an utter chaos. The Supreme Court ordered blackouts across the country, NPAs, generation going down, coal not reaching. That was a crisis of momentous proportion which, I think, in few days time, he was put into the deep end of that, sorted that out. Railways – now, in terms of pushing the high speed agenda, electrification, station upgradation, service delivery, cleaning up the system. Another very-very major shall I say – big crisis – is not the word but close to it. And finally, I mean again, in very-very short notice, picking up the responsibilities when the Hon’ble Finance Minister was incapacitated in terms of his health reasons. So, as I said, Piyushji. It is in many senses – we have now seen you as a kind of national crisis manager. So, it’s a very happy and proud growth trajectory. So, please accept our compliments.

A: You can ask me the tough questions. No problem! I actually want to make a confession today and on the way to the Taj, I was wondering should I… should I not? But then, I choose a must do it because I am speaking from my heart today and now at the end of five years of working very closely with all of you, we have interacted very closely. Many times, when I have been probably a little tough also on you, must have made a lot of adverse comments – some of which you have not liked also and while coming in, I was remembering when CII first was formed. Must be about what 30 years ago? Much longer, but when we had the Bombay Club versus CII fight.

When I was much younger, early nineties… and being from Mumbai, obviously you can understand there are sympathies were at that point of time and ever since then, it it’s always been a feeling that whether CII was a big boys club, weather CII was just a representative of big business or what’s it like. At the end of five years of deep engagement with all of you and I want to share it with full gratitude to all of you that I believe that CII is an absolutely outstanding organization. At the end of five years, I can say it has had some of the finest leaders. Your Secretariat is par excellence. My conception that this is a big boys club or a rich man’s club say when except in the initial period when may be, I am now proved wrong that I used to argue about the GST being a rich man’s or a big business agenda but I acknowledge that probably I was wrong at that point of time but truly, I can see that CII plays a very-very important role in in the interface between the people of India, the government, trade and business industry and I wish all of you well and I wish you continue this journey in the same spirit. We will have Mr. Kirloskar taking over from Rakesh during the course of this AGM, I believe. And wish you well, Vikram….Thank you, Rakesh for all your leadership. I think Uday is the lucky guy, you got saved from… at least deferred for a year but truly, a wonderful engagement and a wonderful experience working with all of you.

You can actually give yourselves, a loud clap…. For all of you…

Q: Talking about carrying on the… I have a deep end political economy question and I actually want to pick up the threats from the conversation with Shri Jaitley yesterday. And I am going to fish out from my coat pocket… A headline that made it to the Indian Express yesterday after the similar discussion with Mr. Jaitley. It says: India should move from the redistribution of poverty to market-based reforms. This was the headline that’s been picked up and this was a fair amount of the conversation with Mr. Jaitley yesterday. The question for you is and it’s a deep political economy question. It cuts across party lines is…The enormity of tasks that face this nation whether it is to pull millions of people out of poverty or to create hundreds of jobs or be an outstanding global power. Do you see that happening with the dominance of what is called status systems, public systems, PSUs or do you see this being achieved largely with the government being in governance and private sector driving this for the next decade or two decades?

It’s a longish question..So there seems to be some confusion in people’s minds as to…Is it going to be largely a state-driven system or is India going to rely on the private sector to achieve these very-very humongous goals. Over to you sir…

A: Good one! Well, first of all, the philosophy of the Bharatiya Janata Party and we draw this from Pandit Deen Dayal Upadhyay. Very clearly, is that the nation’s resources should first be put to use for the poorest of the poor. We cannot afford and actually, more than anybody else, all of you cannot afford to have a country with so much disparity of income. We cannot afford to have a country with nearly 150 districts particularly on the eastern corridor, affected by maoist violence. They will be on our doorstep, one of these days. It won’t be, the day is not far off unless we really plan for the future of a 130 crore Indians.

We will not be able to truly get the fruits of development and if this inequality of income keeps increasing. It’s going to be very big danger for the Indian social fabric, the political economy and obviously when both of these get affected, businesses will get affected. But removal of poverty, getting rid of poverty, making sure that every citizen in this country has his basic needs met. I mean, at one point of time, it was Roti, Kapda,  Makaan. Then, it was Bijli, Sadak, Paani. I think in today’sworld, I would imagine a day where…

And I think we have already reached that day where getting 24 hours power is a given. If it doesn’t come, then there is something seriously wrong but now, the stage has moved to obviously, higher income levels. It’s moved to how we can skill our workforce better, how we can start engaging with the world in the global perspective better. And I think all of this needs the people at the bottom of the pyramid also to rise in their quality of life, in their ease of living. And there is nothing which says that one or the other cannot co-exist. Government will have to play an important role.. be it in regulation, be it in some sort of encouragement to different sectors, different industries, different businesses, also ensuring an orderly development of industry. We cannot have industry also working in irrational fashions. After all, that’s why you have an organization like CCI to ensure that there is an orderly development in different industries. So, government has its own role. PSUs also have their role. You can’t wish them away. Now, there are many things where literally, getting the private sector to engage and implement properly is a challenge.

With due respects to anybody who may not like what I say. But take banking, for instance, now when we have to reach banking to the remotest corners, to the mountains or the maoist-affected areas in Jharkhand, PSUs have a role. When we want to do public delivery of services, very often PSUs are the only ones who come forward and they won’t calculate that every transaction is going to cost me Rs. 75. So, I think we will have to look at a coexisting model. At the same time, government will have to become the agency which encourages larger private sector participation. Yet, regulating the orderly behavior and together, if we work as partners. To my mid, the double-digit growth that this country has been eagerly waiting for is right at our doorstep irrespective of whatever the Reserve Bank may say. And I think to some extent, Reserve Bank will also have to introspect that whether they had any role to play in the economy going down to a potential 7.2% this year instead of 7.4 or 7.6 or why we couldn’t achieve a double-digit faster. I think every organization will have to introspect how much contribution they had to the woes of the country today. But to my mind, double-digit growth is eminently do-able. We will have to move out of the dole culture that Hon’ble Minister Mr. Jaitley said. We will have to empower our people to become self-reliant, to be entrepreneurs, to work for a living. Because otherwise, I think it’s a race to the bottom. If we keep encouraging doles, if we keep encouraging bad behavior, we are all going to be racing to the bottom rather than aspiring for the top.

Q: Thank you. So, creative energetic coexistence between government and private sector. Now, being election season, I will have to draw you into what all of us, you know, friends sitting in the hall. The two issues that come up in India, largely in the election season which is cross party. Nothing to do with any particular party… are two issues: criminalization of politics and electoral funding. There is we all know, even a nexus between these two. And once again, I am picking up the thread because Mr. Jaitley, yesterday did speak about electoral bonds. But we want to utilize your presence amidst today to seek your perspective on these two issues. Maybe criminalization of politics is far too complicated right now for a one hour session but certainly electoral funding and the role that you see, electoral bonds will play to achieve some positive outcomes, is something I would like, all of us would like to hear your views.

A: Well, regarding criminalization, I can just mention a couple of two sentences – there are two types of criminal activities. One is heinous crimes like rape and murder, and dacoity and stuff like that or even corruption, for that matter. Large scale corruption, misappropriation of the resources of the country or the wealth of the people of India. All of these are serious criminal activities. And then, there is a second type of criminal case that is very often reflected in the affidavits of several candidates. Those are you know, when we protest. There is a protest going on at Jantar Mantar and the police has put in the law that says you cannot more than five people, you cannot assemble. That also becomes a case and an FIR is filed and you have to keep going to the courts, several times.

And all of us political leaders have at some point or the other, done agitations, done activities which are of normal political nature, which also results in case. Now, we have the Association of Democratic Reforms come up with all those reports that 90% of the candidates are criminals and stuff like that. I think that been very (unclear). And I would request CII, as you have a very good research wing, to actually cull through these affidavits or get a team of lawyers do it. And differentiate the wheat from the chaff.

Actually, find out which are the parties and the candidates which have these heinous nature of crimes and which are of a routine nature of an agitation, Section 144 and agitation against the emergency. Suppose, somebody had a case against the emergency in 1975 and the case still go. My mother did a dharna at Matlunga on the road protesting against Indira Gandhi’s dictatorial behavior in the emergency. She was behind bars. Now, I don’t think that’s something which should be categorized in a criminal activity this. Because she was legitimately protesting – a thing like the emergency. And I think it was the worst form of political intolerance that the country has ever seen. So, those activities and activities which are of a serious criminal nature should be differentiated and then, we should see which party stands where. Very often cases on some states are also foisted wrongly and the state where you come from, could probably rank very high in that list. Don’t tell me. Are you serious?

Gurgaon from that perspective. But some states, and some political leadership has also foisted cases which are absolutely without any basis. So, somebody will have to do a serious working on it so that we don’t scare the nation into believing that all of politics is bad. After all, we can’t wish away politics. ऐसा नहीं हो जाए कि देश का भविष्य – the youth in this room starts thinking that this generation, our generation is leaving behind a completely battered political system. So, I think that’s my view on criminalization of politics. And we must try and ensure that really the heinous crimes or the crimes which are of serious nature are brought out before the public and public knows who are the candidates who are really not fit to be elected. I mean, for that matter, seeing yesterday some political affidavit being filed amid there are FIRs of pretty serious misappropriation of money. So, those are cases which, of course, the people of India need to know and that is why the Election Commission has stipulated this for the last 20-25 years. I think (unclear) probably started it or who started it. As regards, electoral bonds, Chandra Ji is there a tax? Do I have an entitlement for a tax for attending. There are about 1500 people in this room. So can you send me the list of names, addresses, mobile numbers and email ids? देखो तन, मन और धन से साथ में आना चाहिए but on a more serious note, for all these years and I still remember my father had spearheaded a group of business people in Mumbai. And I am talking of the 1996 election, if I remember correctly. The 1996 election, I don’t know if Uday Bhai was a part of that group at that time. I don’t see too many Mumbai faces here. Nimesh was not there I know for certain. He goes away abroad every time there is an election. But a group of industrialists and businessmen in Mumbai had got together and sat with Prime Minister, with Atal Bihari Vajpayee Ji at that point of time. And yesterday, AdvaniJi also has written about this – electoral funding. Our party has been working relentlessly to try and clean up the political funding system to try and get legitimate money to fund politics. And we do believe if the nation is being moved, the mindset of the nation is being changed to honest governance, honest business. Then, politics will also have to be run with clean money but sadly, with the laws that prevailed until two years ago, when you had to write out a cheque to a particular political party and there are so many people who may say that look I don’t believe in anybody but the BJP or you may or somebody else may say I don’t believe in anybody but the Samajwadi party. I don’t believe in anybody but the Communist party. Each one is entitled to his own views and some may want to give to more than one party.

But there was always a lurking fear that if I was to support party X, how would party (unclear) take it. Or if I am in a state of Maharashtra and I have a government run by one party and central government is some other party, I choose to support anyone of those two, how the other will behave with me. And because of that fear, very-very few people are willing to write out a cheque for disclosure of their name that they have donated to one party or to… or one party – they have given less, another party more. That could be an individual choice – a preference, a liking, a belief in their ideology.

A second disservice done by the same newspaper also which you just quoted is: sensationalizing any name who has donated funds. So, if Mr. X donates some money to a political party. If you choose to sensationalize that इस फलानी कंपनी ने इतना डोनेशन इस पार्टी को दिया. You are actually scaring honest money from engaging with politics and public life and I think you can’t wish away politics and you can’t wish away election expenses. It’s a reality. If you want good politics, and good governments to come in, we need good money to finance that and in this scenario, this fear of the unknown, fear of the opposition or the other party – it’s not the opposition, the other parties, the fear of newspaper sensationalizing it or NGOs sensationalizing it – would deter people from writing out a cheque in an honest fashion.

We experimented with electoral trusts with limited success, the electoral bonds – the advantage is that it is completely anonymous but the money that goes into buying an election bond is honest money, is clean money. There are proper rules framed. You should be a company which has a proper KYC, an Indian company or an individual who is a citizen of India or a partnership company which is registered in India. You should have – the bank will check your KYC that you are a genuine and good company. And then, you buy those bonds. When you buy those bonds, you are declaring that you bought bonds but you don’t have to declare which party you have given to. Similarly, when I received the bond as the political party, I accept those bonds in good faith. I get it into my bank account and I don’t have to declare which person or which company gave those bonds. Both sides – it’s complete anonymity. Even state bank does not give a co-relation which bond is given to party X and which political party has encashed that exact bond.

Q: It is only a anonymous watermark?

A: No, that watermark is to make sure that no forgery happens because, you know, this is like currency for fifteen days. So, for that, they have kept that watermark to ensure that no forgery happens but they mix up all those bonds once they get into the vault. At the time of issue, no serial number is written against any bond. So there is anonymity and you won’t believe that has encouraged more and more people and companies and individuals who otherwise would not be donating or participating in the political process, to actually come forth. I can see this election significant amounts of money for all parties coming through the bond process.

We as a policy have decided not to accept any money except under cheque, a bond or if somebody pays less than Rs. 2,000. That’s pretty small amount. There also, actually the Prime Minister said, there also you insist that do it digital through a BHIM app or through one of the electronic modes. So, we are trying on our side to completely get out of the illegitimate offers that used to come earlier also that we will not accept anything from anybody at all. And the entire public funding of elections should become honest. That’s the intention with which electoral bonds have been introduced.  I think it’s honest money, financing honest electoral activity to give an honest government.

And I do hope all political parties will take advantage. Some who are not willing to accept them or who are opposing them. I would like all of you to ask them a question: Is it because they wanted to skim part of the donations and not use it for legitimate political activity that they are avoiding the receipt of cheques or bonds. otherwise all political parties should happily be accepting clean money. Why is anybody opposing it at all is beyond my imagination. Do they want politics to go down the wrong path or do they honest money to finance politics. And I urge all of you that you are well-meaning people, you want Indian politics to be clean to be honest. I urge all of you that you must participate whatever levels of participation you like – big or small and whichever party you like. I am not even making a pitch on this platform that you support the Bharatiya Janata Party. You may like to support any political party in the country but please whoever you believe in, whoever you trust can do good for this country – participate in the political process because you need a good government, a good government will be good for India and what’s good for India is obviously good for all of us in this room.

Q: Thank You. I am gon’na shift here slightly, move a little to economics and finance. And, this will resonate with you because you did spend a very-very short, intensive period structuring this year’s budget. You would have realized how tough it is to meet the varying needs of our society and yet, maintain fiscal discipline up to usual 3.2, 3.3. You have faced that upfront and you manage to, you know, grapple with it. It’s a tough battle. Many of us in industry are very worried or apprehensive – worried is not the right word. We are apprehensive that in the coming years, what is likely to happen is that your fiscal headroom for pump priming the economy with public expenditure which is what the last four-five years has done very well, because by the time, you inherited the economy, private investment had almost crashed and to get it swinging back again, is taking a lot of effort as we all know.

So for the last four-five years, a large portion of the growth has been pump primed by public expenditure because of certain favorable circumstances, because of focus etc. etc. Your headroom, going forward, to use the Consolidated Funds of India because there have been some strictures now by the CAG on the use of off-budget financing vehicles also. So, the headroom you have in the Consolidated Fund of India and associated revenue streams – the fiscal discipline that you have set to yourself, which we all value, leaves you very little headroom for continuing to pump prime the economy to achieve 7, 8, 9 per cent growth in a situation where other competing demands, as we have seen from the agrarian sector, from universal basic income, stroke direct benefit transfer, stroke health, education and all those sectors are increasingly, politically and socially going to be driving public expenditure in that direction, leaving very little for pump priming on the infra front. So, the solutions obviously are known to you. The question really is what direction is a government or what direction should any government take. Should it be to really crank up the PPP engine again across different sectors and draw private capital in? Should it be a faster turnaround of state-owned assets which is called monetization or asset recycling? What in your view is an appropriate economic strategy where your fiscal headroom is limited for pump priming the economy?

A: Well, at the outset, we all remember the story we inherited in 2014. Fragile five economy, double-digit inflation, falling growth, falling or increasing current account deficit. It was a serious crisis-type situation that we inherited. To the credit of Prime Minister Modi and Finance Minister Mr. Jaitley, we have assiduously built up the economy over the last five years to the extent that we are now at two and a half per cent inflation from a 13, 14 per cent about 10 years ago or even until, 2011-12 – we were at double-digit inflation. Our growth numbers, while this year, is still in the 7.2-7.4 category as they have estimated.

My own sense is unless we had built up this foundation of low-current account deficits, low fiscal deficits, low inflation, low interest rates, we wouldn’t have been able to aspire for what we are aspiring in the next five or ten years. And in fact, if you ask me over the next two or three decades. And as you rightly pointed out – during this period, it was very difficult to get private investment to pump prime because certainly, there were challenges – there were banking challenges, there were credit issues, there was capital issues, the stock market had gone down to abysmally low levels. There is a whole holistic problem that we had to grapple with. Today, things are different, we are almost touching 40,000 on the Sensex.

We are at very-very affordable levels of inflation. Interest is continuously falling and looking at the trend, I see, going forward – a significant possibility to further reduce interest rates. All prices have been reasonably stable. So, current account deficit is no more a concern. We are at the lowest CAD last month over the last 17 months or so. So, things are in a situation where the banking system is again raving up, we have significantly been able to control foreign borrowings. So, if you will see, I had mentioned in one of the interactions that in the last five years, while foreign exchange reserves have gone up from 300 billion to 419 billion today.

We inherited 300 billion, Uday bhai, and we had 419 today. But what we also inherited was some 320 or some odd billion of external debt which has not gone up in the five years. In fact, probably has in fact, come down a little bit. We even repaid the 35 billion that the UPA, towards the fag end of their tenure – had borrowed to pump prime the rupee. We have even repaid their entire amount with interest. We paid all the subsidies that they had left behind unpaid. So, we have actually, managed to clean up the balance sheet and yet, the CAPEX of the government which is not necessarily fully financed by the budget but where we have a role by viability gap funding, some sort of subsidy, some of balance sheet items also – has tripled in the last five years.

What we inherited was about 3 lakh something per year. We are now at nine and a half lakh. So, we are 3X in five years. I dare say you would never find a period in Indian history where in five years, every economic parameter has improved so significantly which means we have prepared the base for the future. Going forward, my own sense is that in the next five years, you are looking at a huge amount of capex on the infrastructure side in this country. And if the same run rate goes, by 2024, the economy will be having government supported capex. I am not even talking of private capex, to the tune of 25 lakh crores by 2014.

Now, government job is not to finance all projects but let’s say a road has a certain traffic in the long run you can see traffic going up but in the short run it may need some viability gap fund. When you look at solar power, wind power, we did support it initially. When we look at extra-budgetary support we look at the financial viability of every project. Otherwise you would never get funds. So when I do, let’s say electrification  in the Indian railways, now the pay back of that after charging interest will be 3 and a half years or so. When we did the LED project, I said it before, we have only invested 2 billion dollars as a nation. 1.4 billion LED bulbs being replaced at a cost of under 2 billion dollars but we are all collectively and I hope all your business is also a saving. Nearly 7 billion dollars every single year. So we are doing very economically prudent management and support but how did this  happen with a government company, ESL giving  the initial thrust and some 300 million bulbs, the ESL procured and sold thereby bringing down prices by 87%. Now it is fully private sector led initiative.

Now ESL does not need to buy and sell bulbs. They are moved on to much better products, much more valuable products. So our approach is empower the private sector, give the initial thrust, make the project economically viable, wherever it needs supplement the project finances so that  the refinery in Kakinada and Rajasthan both those refineries needed a viability gap fund. WE have asked both those states. Rajasthan has agreed, Andra has not yet agreed. We said you give us the viability gap funding and 12 billion dollars of two refinery projects will be coming up.  So our approach is extremely business savy, business minded. I think Mr. Jaitley more than a lawyer has almost worked like a investment banker

Q: It is an interesting observation because as you were talking this is an interesting phase in our political economy, government supported private sector and related capex.

A: I would rather support that infrastructure building which will help us in the long run than give out a dole because that dole is going to be lost , may be give a temporary feel good factor but ultimately it is not going to help the economy. But look at what happened in the 1860s in America post the war. They pump lined initially with a huge amount investments in infrastructure. Post the Great Depression the new deal of Roosevelt was all about pump priming the economy. Japan did that, China did that after 1984. So that is the way forward.

Q: This kind of hybrid annuity  or there is 40% viability gap, capital support, combination of government  supporting private sector capex is indeed a good model and we  hope that in the years ahead we are able to see more  of this. I am now going to seek your permission. I am going to ask you an uncomfortable question. I do that with the full realisation that you have been over the years very frank with us , open with us and that gives me the confidence to  ask you a frank question and that is about data. This one is tough. The large sections of even this audience that in private conversation over a cup of tea, drink or sitting together in drawing room. Conversation turns to the authenticity of Sarkari data. Whether it is employment, whether it is growth, whether it is y, x or z that the noise level has risen to a certain level which we have not heard before about people talking, come supporting some questioning but there are both sides to this. What is your guidance to us? We are a Industry chamber commerce.

Let me begin with a real life example about data just so that the perspective is well understood and frankly when I come to the second part of my answer you will understand that everybody in this room is a culprit of the data going wrong.

Q: Is it a tough question or easy question?
A: Very easy question and thank God you asked me. My office will think we scripted this together because actually record needs to be set right. When I became railway minister about 19 months ago everywhere I went the issue was about punctuality. I am sure maybe not many of you travel by train here but maybe somewhere youngsters may be travelling by train sometimes. Everywhere I went I got the story of bad punctuality on trains and every review I did in the railways, you know what kind of reviews I do. Not scary. You don’t have to quote IAS officers who have given a wrong picture about me but I am sure the people are happy that I am a little tough they don’t want a soft minister who is just mollycoddling with the bureaucracy.

But every review meeting they would come up with data power zone is 90% on time, another zone 98% on time. Every time zone was doing a good job on time punctuality. I was confused how do I now talk to my officers and what do I answer to the people of India. So we started getting to the root of the problem. It is a 160 years old organisation and Lo and behold! How is the data compiled? The station master rights what time the train came and what time the train went and that’s what is taken up right till the chairman Railway Board and the minister and it gives you a picture that everything in the railways is ok. So last year I ordered all the intersection points would automatic data log.

So every 40 or 30 kilometres there was a data logger and only 96 data loggers to begin with now there are many more at a cost of about 1 lakh each. I started getting the data fed in automatically at some 96 points every Station Master in between knew that if he fudges the data he will get found out in minutes and anybody who gets found out doing this in my ministry you know what happens and believe me I switched on all these data loggers on 1st April 2018. This is not an April full fool’s story.

And Lo and behold! 31st March to 1st April punctuality fell by 20%. Straight 20% fall in punctuality of the train didn’t start getting late overnight but that true data started coming now. When you go to a doctor he can only treat you if you tell him the problem. If you go and stand in front of a doctor he will take out your heart instead of replacing your knee. So it was a similar situation. Now empowered with that data June, July, August, 3 months 17 zones I would sit relentlessly literally with micro issues even with whether do you have a spare rake that an incoming train gets late.

Can another rake replace it so the next train also doesn’t get late and we worked assiduously on the entire story and today on the 1st of April one year later, though I have worked on it only 6 months by the time of the reviews my own understanding what’s the solution to the problem we are better than what we were on 31st March with the fudged data. Today why are better then we were with the fudged data in terms of punctuality and the number of minutes lost which is how you calculate in the Railways as you know, is down to about half and in many cases 2/3rd.

So that is the impact data can have. We all know in this room and I dare say everyone of us  we hire one person but contract 3 persons. There is literally in this country so many new businesses coming up, so many new entrepreneurs coming up, nature of jobs is changing, technology is taking over in many cases, person working in Ola and Uber that is never going to get reported and it is like the question if you ask a question do you have a job many people will say no but do you have a livelihood I think most people will land of saying yes because even at domestic today would probably be earning 20000 rupees as madam will tell you three or four part time people coming to our home.

But it’s a livelihood it’s not a job many people complain that when the railways advertises then why did you get one and a half crore people that is because in this country why still have the mind set government Oh government job whether you work or not you are permanent in fact it is better not to worry you are se there will not be a vigilance case against you and you have a house you have pension and everything taken care of. So I think there is an attraction for defined formal job that you cannot wish away but the world is moving towards entrepreneurship, towards startups. Catch any of your children today they want a startup they don’t want to do a structure NTPC type power plant.

So in this changing age should that data not be more robust? Should did not capture current a reality? GDP data undergoes revision every 10 years  and a revision how it is calculated because for example some of the data may be captured in typewriters sold 30 years ago. There is no typewriters role today. It may not be capturing the manufacturing activity of mobiles which is the business of last 3 years so they are different all these different television channels each one of them may be having a thousand stingers and other people cameraman blah blah blah none of them is shown up in a job.

But if you tell people that if you don’t have given 6000 income a month we are gonna give you additional 6000 rupees then everybody today who is also either under ATM number or ESI number or is paying income tax for whom may be earning 20000 to 30000 rupees also will all start under reporting and well all want to go down to less than 6000 on the record and I will tell you a live example of the Railways. In Coal Vinayak you may remember I had done a portal and pulled all the coal mining companies that all your contract labour I want that entire data on the website: name, PF number, BF paid, ESIC number, ESIC paid, minimum wages paid. As principal employer I am responsible by the way so are all of you for your contractors and I said I want all that data on the website and they started that process and  by that time I moved to railways I have been struggling with Railways to do it now I am finds finding some traction but you know what my officials tell me? They tell me sir the people are now telling us don’t put our name on the official record, I will not accept money by digital payment or cheque or RTGS into my account I don’t want PF and ESIL. I only want cash please pay me on the side because if I take the amount officially I lose my BPL card and I lose a potential dole that the government may give me.

That’s what I meant when I said it will become a race to the bottom. You let people fighting each other to try and show my income is less than 6000 and give me another dole. Our effort is give everybody a house, give everybody electricity, toilet, good education, good health, take care of their basic necessities, give them a skill, encourage them to work for a living, create infrastructure which will create job. Now when I talk of let’s say 25 lakh crores on capex only of the government  forget what else the private sector invests what would be a labour component you will agree that a liver component would be 25% of that. So 25 lacs means you are talking of 6.25 crore as a labour component only on government supported projects, the rest apart and look at the incremental jobs that it will create at any average of about lakh and a half. You are looking at 4 crore jobs being created out of that. Actually more than that just by the government supported infrastructure but none of them mind you, may show up in the job data. Job data will still show the railway official relies on my roll but all these will be subcontracted the private sector will be participating.

Q: You see new comprehensive system is required which is something the government should be doing.
A: It is our job to do it because otherwise it will be like the railways. Wrong data: it’s like garbage in garbage out. So my submission is any of the naysayers who has any doubt reflect on what was the data being given earlier, what was the span of the industry and real jobs that were being captured in that, look at the GDP calculations 10 years 20 years ago, what kind of business is it reflected, and what is happening in India and the rest of the world today and see if there is a correlation between the two, if not I think and courageous to get the right data right sources the right understanding of the data so that as as a doctor’s job which is what we are supposed to do we are supposed to hand hold and help the country, the country men, industry, business, farmers, small industry everybody our job will be better done. We will really know where the nation’s resources should be targeted, we will really understand where the stress is and do our job better and really do good for all of you also.

Q: So I have a question for you on Railways again. It’s a conceptual question. You are now heading that institution which by any International standards is a behemoth by track, by employment, by any index you take. You have got three objectives in railways. You have got a social objective for example subsidized suburban traffic. You have got a developmental objective: build lines in Kashmir, North East, naxal areas and have got a commercial objective which we will quiz you. How does an institution as a stakeholder, as a citizen of this country, how are you as head of that institution, wouldn’t you be seeking clarity by saying give me one dominant objective and there can be other subsidiary objectives? How to use grapple with the growth and development of the railways with three equal weighted objectives: social, commercial and developmental?

A: There is absolutely nothing which says all three cannot coexist to my mind. The first and the foremost objective is that all our customers deserve a better deal whether it is a passenger whether it is all of you moving freight hopefully someday some of you going on the Palace on Wheels to enjoy your vacation. I think every stakeholder, everybody is looking for a better quality of service timely trains clean trains clean stations better facilities, good food and sufficient availability of infrastructure.

Are you aware that the Indian Railways in the last 60 years or 70 years, now post independence has built up only 30% additional infrastructure and the traffic: freight and passenger put together has grown around 1500 %.  In this situation you almost have broken system that is being inherited with hardly any Investments. But look at what we have done. We have removed political interference. Now it’s done like a professional body and actually doing projects with an economic objective, understanding that project should be viable. Yet we do edge in a few projects which are let’s say to the aspirational districts because connecting in aspirational district into the main system you are actually opening up vistas of growth in a backward region.

Going back to my old Maoist story that goes 150 districts, which suddenly need to reach out. So I have just approved 6000 crores for a project in UP which goes to connect three or four aspirational districts. I thought it was well worth. The people over there will be able to connect and get involved with the rest of the world because after all all of us in this room, our forefathers someday, I promise you, look back in your family history except those who were Delhi based, someday our forefathers had boarded a train to reach somewhere else and made a career, made a life, made business and we are where we are today. Now we have to care for those who have been left behind.

This developmental objective just cannot be ignored that is equally important and since you also talked about the economic viability and operating ratio we have challenges. I have to pay on the 7th finance commission 22 thousand crores extra. Now that is 14% shaved off of your revenue so you can imagine the struggle of trying to survive and be profitable with 14% shaved off your revenues. But that is the part of doing business, a part of running the utility or service in the country so what did we do? Our soft option was just indiscriminately increase rate by 30/ 40%, increase passenger fares 20/25%.

But I didn’t do that we kept the balanced approach and nominal increase in freight which are effected after 3 years, very nominal increase and not on all commodities, select commodities and  where I could see that they can afford it. Passenger fares I didn’t touch because I believe unless we give a good experience to the passengers I have no right to ask them to pay more particularly the poor, particularly the common man who is already struggling with enough challenges it is very easy for us to say it should be a fully commercial organisation, increase passenger fares but I have to compete with the airlines or half my trains will go empty if I increase fares in the upper classes.

If I increase affairs in the lower classes my poor brothers and sisters In the villages may not get an opportunity to board a train like each one of us. So we have to balance this and I am trying to see we can actually make money out of projects that we implement. So I focused on all the routes and it’s giving us results. Are you aware that in the last 5 years we produced four times more coal produced and transported than between 2009 and 2014.

Can you believe that 37 million tonnes growth in the previous 5 years and and one hundred and 40 million tonnes growth in the last 5 years.  All of this is possible and that has helped us survive as a railway and this is coal production a large part of it goes  by the Railways. So same way electrification when I am hundred percent electric I will save 2 billion dollars my stations go and have a look at the stations out there. I was reviewing and even though we are in the election mode my job is a Minister doesn’t get over so we have to do our reviews and I have taken it as a mission which I have declared before the election so I am not violating the model code of conduct when  I say this I have taken a mission that 6400 railway stations will be made Wi-Fi enabled on Ganesh Chaturthi which is 2nd September 2019.

It was about less than 400 when I became a Minister 19 months ago. 31st March we have been able to build it up that is 5 days back to a thousand. I told them that we have to reach 6400 by 2nd September. You wanna make a guess what it is five days later? Anybody wants to make a guess? It is 1500 today. I got it at 6 o’clock in the morning today. Maybe by today night it it may become 2000. Now all of this is possible and it is a government organisation and Vikram may remember because he used to interview me a lot before 2014 before I became a Minister but I would always say even before I became minister it is not the ownership of an organisation which defines its success or failure, it is vision and it is leadership and I think Prime Minister Modi has given to this nation both vision and leadership so that we can aspire for a glorious future.

Q: This time I am not going to ask any questions you ask some hard questions two Indian industry.
A: Well, I think first of all I believe that we will have to believe in ourselves. Our biggest problem that all of us, I believe myself also, honestly I think as a nation in ourselves and I believe that the next generation is watching all of us very closely. Our next generation is watching every move we make and I think we owe it is to the youth sitting at the back of the room particularly. We all owe it to them that what we will leave behind is an honest country, what we leave behind is a country that cares for the environment, what we leave behind is a country that is safe and secure, it is not struggling with challenges of ideology and challenges of national security within the country, and I believe an organisation like the CII can play huge role when it comes to building up the trust in the next generation that they can also go with confidence they can also help this country rise from the kind of depths  that we have at some points of time reached in the past and help bring back glory to India and I can only appeal to all of you my friends that let’s all of us give it that push that is required.

We have a golden opportunity to leave behind a better country, a better place to live for the youth of India and let us dedicate the rest of our working lives for all of us in the first 3 rows and both of us. Can we all dedicate ourselves to leaving behind a better future for our children and to my mind all it will take is little bit more concern, a little bit more social responsibility, a little bit more concern going beyond the money that we earn, a little more concern than the share price for the quarterly result. It will need a little bit of more compassion and empathy because possibly many of us have not ever lived in a home that didn’t have electricity. For those of you in Delhi inverter or 2 DG set which way now help to do away with maybe none of us has the ignominy of having our mother or a sister not being able to go to the toilet between sunrise and sunset and 2 out of 3 women in India had to suffer that ignominy which not many of our wives and sisters have to suffer without sanitary pads and use one cloth or newspapers.

Probably none of us in our homes don’t have LPG gas connections, but if each one of us was to pick up some idea it is your choice you might look at something to do with tribal education, you may look at something to do with our slums in the neighborhood, you may want to do something with the quality of education. Of course it doesn’t mean setting up of left learning institutes and Universities and the neighborhood of Delhi. But on a serious note if each one of us was to take it upon ourselves that one project I am going to immerse myself totally and make a difference and leave behind mark in the footprint of sand and I want a nation to remember me  that I was the guy who kick started a revolution let’s say in energy efficient pumps that I will make sure every farmer in this country gets an energy efficient pump which can dramatically change his future and the future of all of us. Wasteful use of water is the next biggest challenge for this country so I think if each one of us was to pickup one challenge and immerse ourselves totally in it, then I believe all the youngsters sitting back there will remember our generation for the good things that we have done and not curse us long after we are gone.

Thank you.


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