October 6, 2017

Speaking at World Economic Forum, 2nd day session in New Delhi

… that it’s great, because that as you know I have always enjoyed getting feedback, which helps us improve our work and our effort. But if it is motivated, if it is singularly intended to disrupt the positive environment, then I think that will be pretty much unfortunate for the country, because somehow in this day and age of 24 hours television, breaking news and all, it’s very easy to sensationalize without really bothering about the outcomes and no often than not my own experiences. Very trivial issues sometimes are sensationalized beyond they really deserve to, and very often falsehoods are sensationalized with not even an apology.

I will share a small example. Once one of the pink papers wrote that I have a shareholding of some 20 or 30 crores in a company, which had recently had an IPO. Now the least I would expect a pink paper, which is basically running economic news is to verify its facts, and a Piyush Goyal name can be verified very easily. Our data is on the website every year as Ministers. And, if at all, they should have otherwise written that I am falsifying my data on the…that I am submitting to the honorable Prime Minister.

But, it’s very easy to write that Piyush Goyal owns 30 crores worth of shares, there must be 500 Piyush Goyals in this country, right? So, this kind of sensationalism that is sought to be created, and I am saying this with full responsibility, often motivated should change to a more positive mindset where what is wrong you criticize and you take us to the cleaners on that and what is good for the country, be willing to even say that that is good for the country.

That is one part, and the second part is the change that should….we always talk about ‘be the change you want to see in the world, make a difference to society – Malvika spoke about it yesterday – I think the more all of us get involved. I was in a programme this morning where a gentleman came up to me, said I have retired from the defence military engineering services. I said great, I need help to make foot bridges wherever there is large amount of passengers on trains in military precision and military speed, can you help me? He said, I would love to help you.

Now, that’s the kind of enthusiasm you find in a large section of India. We are trying to channelize – I have already set up a meeting to meet him and see how he can help me in my work – we need to channelize our own energies to get more involved in this changing dynamic that the country is going through. I have often said that we also have to become whistleblowers, so if we see somebody doing wrong, we have got to talk about it. If in our industry, she is in the textile trade, somebody is evading taxes, we should let the authorities know so that we can have a level playing field, honest business prevails.

Rather than just cribbing, crying, cursing the system and hoping it is somebody else’s responsibility to stop that, I think if we all decide we will never pay a bribe, we will not encourage or allow anybody to cheat on taxes, this country can be just completely a new story by 2022.

Q: I don’t want to digress and make this a political issue, but since you spoke quite significantly in your opening comments about motivated sensationalism. Are you talking about comments that have been made about the state of the economy?

A: No, no, no, I am talking about general stuff. There are so many things that come up which are irrelevant very often, sensationalized and by the next day it’s not even there anywhere. And, nowadays, with these online media houses, social media is still a different thing, online media houses – you have a number of them who will write anything and get away with it, because they don’t even have to substantiate anything.

Q: So, do you believe like Harish Salve does that social media needs to be regulated in India?

A: I don’t think you need to regulate social media. I think, collectively, we as the citizens of India need to give a befitting reply to such motivated people.

Q: Let me start by asking you Minister Goyal, because you spoke about a need for a mindset change, as well as linking that to outcome. If I could ask you about whether we could change this L1 mindset that we live with in this country, and I will link that to corporate boards, because yesterday we have had the Uday Kotak Committee on corporate governance bring out its report saying that people who are qualified to be on corporate boards have the domain expertise of that particular industry, etc. should be the ones who represent corporate boards. But this mindset that it has to be the lowest bidder irrespective of whether they have the expertise, they have the competency, they have the skill, I mean is it not time that we look for reimagining this template, reinventing this template for a better India?

A: Well, first of all, since you alluded to Uday’s report, let me also tell you that I think he has gone completely off the mark here.

Q: He is gone off the mark, why?

A: That’s right, and I will explain why. I became the Power Minister of this country, I didn’t know the ‘P’ of power or the ‘C’ of coal, and renewable energy was the farthest thing from my mind when I became a Minister. IAS officers all over the country, many of them have done illustrious jobs. I don’t think they have some domain expertise. Sreedharan didn’t know what a metro looks like when he became the Metro Man of India.

I mean, I don’t think, very often I tell people when they come to me and they say that, you know, this company doesn’t have experience in manufacturing pipes, for example, we can’t buy from them. I said, there is a process to determine if the pipes that they manufacture are good or bad – you do tensile testing, there are all sorts of testing available. But if everybody takes that mindset, he will never be able to get into business, so Make in India or Entrepreneurship and Startup India can be history from tomorrow.

To my mind, you have to encourage diversity of opinion, diversity of experience. So if I am running a steel unit and I have run a steel unit – forgings, I didn’t know a damn all of that, I am a chartered accountant. So, businessmen are supposed to keep their accounts honest and correct, businessmen are, maybe if it’s an engineer, doesn’t know what – Dirubhai Ambani probably never went beyond a certain basic level of education.

So, I think this is a completely wrong thinking. Just education doesn’t make a man any great, any expert in the field, and the most educated people run some of the biggest frauds that have happened in this country.

Q: So, is that the only reason why you believe that he is gone off the mark or do you think other recommendations as well?

A: No, no, since you raised that, I have not even gone into all the details. There are many things good, many things which I think are inappropriate. There is a good idea that a woman director should be compulsory – great idea.

Q: And an independent director?

A: That’s also a good idea, but since you are raising the point I can labour whatever little I have read on the television screen. He also spoke about the boards themselves should decide the independent directors. Now, frankly, this is what is already happening. There is nothing new in that. But that is where the problem is. When I run my board, I choose people who are going to be yes men, who are going to listen to me or going to go by what I say, and that’s going to be my board. But that’s the whole problem, the base problem is that only.

So, what he is recommending is that I get to choose who will be on my board, who are convenient for me to be on the board. So, anyway, we are not discussing Uday’s report, I will talk to him tomorrow maybe about it.

But, Uday has been like a mentor for me for 25-30 years, I love him. And therefore, I can take the liberty and he takes the same liberty with me. When I go wrong, I know that Uday is there to tell me you are doing something wrong here. So, I just said it because these were 2 or 3 things that I just picked up on the screen yesterday.

Q: Let me go back again to the mindset change that we were talking about Mr Goyal, and how we can actually insist within government that the policies are (inaudible)?

A: See L1 is something again which is not easy to do away with, and for good and bad reasons. When you point out L1 is not good, you are talking of quality of service. Let’s say if I want to take an architect, I certainly can’t take it on an L1 basis. You know, when a PSU is disinvested and merchant bankers bid for it, and there may be some merchant bankers in this room, every time they bid zero. Are you aware of that? Why do they do that?

Because of two reasons, they make money on the side because of the investments that flow in from them and they get some carry on the money that’s invested, you know that very well. And the second is they want to up their league ranking, correct? Now, in that case, it’s certainly we cannot do anything, everybody is zero.

I had, in fact, suggested (inaudible) Secretary, which I usually do, like in the coal mines. And now, you start asking them how much money you will pay us to be the merchant banker of a disinvestment to the government. But, the bigger point is that, look, we also want probity and honesty in government. Beyond a stage, if we start messing up with L1, we are also going to land up with scandals and excuses of quality always becoming a cause for scandal.

Therefore, there are established processes. You can create committees. You can create technical specifications which are robust and protect you from the riff raff. You can have 70% of the marks for technical, 30% for financial bids. There are ways in which you can reasonably protect. I personally am of the opinion you should have a technical spec which is strict, remove the chaff from the grain, and then allow them to bid on a financial parameter. Many people use the 70-30 or 50-50 principle, I personally believe it leads to more objectivity, and that people can manipulate transactions. I have so far avoided doing that.

A: I will give you a simple thing. If I invest 150,000 crores, and if even 20% of that is labour costs, which I am being very conservative by Indian standards. It’s 30,000 crores. 30,000 crores the railways people don’t do that investment, it’s all done through contracted and outsourced stuff. So that 20% is 30,000 crores, 3 lakh rupees per person at an average, some may be less some may be more, is a million jobs. And I am spending that every year.

By the way, I want to give you, why I said Janbhagidaari or people’s involvement and why it should be a collective effort. Mam spoke about tourism which he alluded to.

In the railways, what am I doing? We have 276 saloons, including a saloon which I can use to go anywhere in the railway, right? It’s a beautiful, luxurious saloon, you may love to go on that some day. But we are not planning to use those saloons. We are making sure that henceforth you will have to pay. Right now, I can only give it to you as a favour.

But what we are doing is, we are keeping those which are essential for any unfortunate accident or repair work or inspection work with the divisional managers, moving probably a 150-170 of them out of the divisions, creating luxury trains out of that. And I will tell you the thinking, I will have a train go from Delhi on the Buddha Circuit – Sarnath, Kushinagar, Gaya. And I will tell you why I am doing it, because in those places we don’t have very good hotel facilities, stay facilities. But, these trains have beautiful staying facilities. So, a Japanese can come in that train, stay in the night in that coach, good toilets, good everything. In the day, pay his respects at the Buddha tourist spot, again come back in the night go to the next place. So, his hotels, his stay, his toilet, everything is well taken care of. I will probably add one or two Japanese translators or whatever country’s – Chinese translators. And there, lo and behold, without doing anything else you have created infrastructure.

A: You know Shirine, when Prime Minister spoke from the Red Fort on 15th August, 2014, his first address, my daughter was sitting on the ground below the Red Fort. She was I think that time all of 16 or 17, and that dialogue of the Prime Minister, that statement had a profound impact on her when he had said on that day that we are all the time telling our girls how to behave, how to look at boys or how to take care of themselves, why don’t we teach our boys how they have to behave, how they have to look at the other sex, what is proper, what is improper.

And I was remembering that in our time in school, we used to have moral science classes, and I think it’s not there in schools anymore. But if we were to try and introduce it, I don’t know your channel, but many would be first off the block trying to tell us ‘you are trying to force education or force a certain culture or force Indian tradition and heritage on the children. And, therefore, this whole political discourse in the country has become one where every good step also, which is in the interests of the people of India is looked at with a jaundiced or a coloured eye and then sought to be converted into a issue which more often than not has no relevance, nothing communal about it, nothing really political about it. But then if we try to teach moral science, you are trying to teach Hindutva, you are trying to teach Gita or whatever will come in and you will be back to square one.

Q: Well, I don’t think telling somebody that they need to respect a woman or respect the differently-abled has to necessarily be linked to a particular religion or to a particular text.

A: How I wish you have a skill development course on that for all the media also.

Q: I can’t speak for anything beyond my own organization.

A: Just last point, when the Prime Minister in that same 15th August, 2014 speech, announced that within a year, we will create a toilet for boys and girls separately in every government school in the country. That was one time where probably L1          may not have been so strictly possible, because you had one year to do 430,000 schools across the country, toilets in 430,000 schools, a lot of private sector companies came forward also. But that’s where the government showed its true mettle in a way. The companies which were under Power, Coal and Renewable Energy at that time did 121,000 toilets, about 1/3rd of them were done by just PSUs under that Ministry.

Now after that I realized what Ajay is saying. I realized that if we had instead of doing that, we had partnered with the private sector and we could have done a far better job in terms of quality. We could have maintained it far better, about which I saw problems later on. So, now about a month ago, I had meetings with Tata Charities, Piramal’s Charities, a lot companies in Delhi…… lot of people came. Then last week, another 3-4 more charities came forward. I am trying to see how we can leverage the same PPP model to get NGOs in the private sector and government spending leverage each other. There is a huge amount of money we give out through our various programmes – be it Beti Bachao, Beti Padhao, be it our maternity programmes, be it our programmes for education. There is huge amount of money spent, forget CSR, in the normal course of social welfare schemes.

So, if the NGOs, and I find some really well-meaning people there, government schemes and our own CSR, if we can dovetail that, I think we can get a big bang for every buck that we spend. We can leverage and multiply manifold and also stop duplication. Out of 8 or 9 trusts, 6 or 7 spoke about health, 5 spoke about education. So, we are all working in silos, if we can dovetail all that, it can have a transformational impact.

Q: Yes, because skill matters. But, specifically, on the need for public-private partnership to create social infrastructure if I could broadly call it that, whether it’s healthcare or education. And these have been experiments at various state governments have undertaken with the private sector where you use the government infrastructure, but get the private sector to actually run a school or run a hospital. The NITI Aayog, in fact, in its recent proposal has suggested a PPP model where you use government infrastructure, but it’s actually given out to a private sector player. Do you believe that that is the idea for the future when we talk about improving the service at the last mile, do you think that that is going to be an idea that will be given currency by this government?

A: There is no one-size-fits-all in these things. You have to be open to ideas across the board. I will tell you a small thing. We wanted to start station development. Companies were not coming forward, they wanted to see if this experiment works. So, in Gandhinagar, the government gave out an EPC contract, then the station is being developed, a hotel will come up and the tendering has been done and a good company has got the tender to manage that hotel when it comes out. We have done it already so that the furnishing can be to their taste.

It will be a beautiful station, and a hotel on top. Hotel given out on management contract, like Hyatt and everybody takes, they take 3.5% that’s the tender price on which it went. Same formulae, technical specs 5 people or whatever were shortlisted, and then in the financial bid this company won. And, once we have 3 or 4 such cases, then the general public will start taking interest. If EESL hadn’t done the huge LED roll-out, the private sector would never have reduced their prices by 90%. So, I think every project has its own best method.

Question & Answer (Audience)

Q: This question goes out to anyone on the panel. I am Ratul Puri from Hindustan Power. Minister Goyal yesterday talked about trust, and said trust is a critical factor. And I believe one of the key elements in restarting the investment cycle, creating jobs, doing all the good things that India needs to do is to enhance trust that is there amongst all key stakeholders, the media, industry, government. How do we re-establish this element of trust, some element of trust that may have been lost, how do we go forward and enhance it and build upon it?

A: I think, for example, the Finance Minister had mentioned that if people start paying their taxes and we get more tax revenue, we can reduce the tax rates. If more and more people start self-policing, so let’s say she is in a textile business. There are 10 companies, if she knows that there is one company which is cheating or two which are cheating, if she lets us know about it and we can stop that, then it will encourage everybody to start being honest. But if she allows that to continue and god forbid that comes to the attention of the government. Then what happens is one wrong step leads to everything becoming suspect.

So, I think the trust is something where everybody will have to put their foot forward. We in government will have to be more trusting of people that they are paying their taxes honestly. The industry or tax payers will have to be more honest in terms of declaring their business and their accounts more honestly. And as I said, the media will have to be more trusting in terms of actually seeing, is there a mala fide or a bona fide.

For example, we want to amend the Prevention of Corruption Act. The Prevention of Corruption Act today castigates you, irrespective of whether you did it with the best of bona fides, though it went wrong or you had some mala fide ….We are trying to amend it that only where you can prove mala fide you should be taken to the cleaners, but bona fide decisions can go wrong.

Similarly, in banking, after all, there are entrepreneurs with the best of interests they started a business, somebody can go wrong in business that’s why they are entrepreneurs in the first place. There is a risk associated with business. Now, if the world is going to look at every entrepreneur with a jaundiced eye that he’s cheated the bank, or he is, save and except a few willful defaulters, but otherwise if the world starts recognizing that failure is a integral part of success or business, I think it will change, it will bring back the mojo into the business, into industry.

A: Shirine I can appeal to all the people in this room, just so many people if they apply their mind, what government can do, what people can do, what industry can do, what bankers can do, what media can do to get back trust in the system, if everybody puts a one pager on it, and maybe WEF or somebody can compile it and come out with a small note on that, I promise you the government is open to listening to it.

Q: I am Sugandha Munsha, I belong to Patna, Bihar. I am representing Global Shaper here. So, my question has two parts. It’s a question-cum-understanding I need to develop from the whole forum. We have launched Beti Bachao, Beti Padhao that is doing very fantastic job in making people be the change you want to see in the world. Now, do you think it’s the time to also launch a campaign equally – Bete Padhao, and Beti Padhao? That’s kind of a campaign which also talks about men’s socialization. The second aspect is about the women workforce. Agriculture is one of the greatest sector in India, but when I see, I work with women farmer. They are invisible. Their contribution is not being recognized. How do you think we can work together to make this challenge and bring a solution to this?

A: That’s very much possible ma’m. Again, I come back to those trusts who came and presented to me. Many of them are doing wonderful work when it comes to farmers. I will give you a simple example, Devendra Fadnavis, Maharashtra’s Chief Minister, along with the Tata trusts is running a programme on Jalyukt Shivar, where they are creating small water bodies in remote areas in the state of Maharashtra, so that even if there is rain only for two days, the farmer is assured for the rest of the year he won’t have a water shortage.

Now, the Tatas, Amit Chandra, many of us know him, Amit came up with a desilting programme. It’s a brilliant programme. These water bodies often have silt accumulated over the years that silt is like gold. If you desilt these ponds, not only are you expanding the water capacity, but that silt when it goes into the farms, it’s magnifying their productivity twice and thrice over. So, their incomes are increasing, now farmers are willing to pay money to take that silt. So, it’s becoming a self-financing programme. You desilt, recover the money from selling that silt. You add to the water body over there, carrying capacity.

So, there are a lot of things that can be done, which can truly impact farmers. And, it’s again people like us, people like us who understand who have seen how Israel, for example, has three times our productivity who know better ways to use fertilizer, for example, rather than just putting in more and more urea into the land, who can help educate farmers with soil health cards, drip irrigation. What’s the best product to make depending on market forces?

I am trying to see if I can bring if I can bring cold storage, let’s say in Nasik, all trains coming out of Nasik having cold storage in the onion season, and all trains going out of Himachal having a cold storage in the apple season. So, it’s a role where we can all contribute both with ideas and many of us with implementation.

Q: Hello, my name is Raikar, I am a global Shaper. One basic query I have sir, there is a lot of gap in communication between the government and the public. Now, a government is doing a lot of things. There is a lot of gap in the communication, but the people in such forums everybody is talking so many things we want to do a lot of stuff. But people are wondering on the ground that what’s happening, they have no clue what’s happening. So, this gap in the communication is a really big problem. I really want to know what are your views on how to bridge this?

A: I can make a suggestion gentleman. You have a number of these youngsters involved with the WEF, right? I am willing to have five of you, seven of you, ten of you, spend a year in my office, help us create a communication strategy and actually implement it. Let it be a two-way traffic to convey what we believe we are doing is right and to hear the people’s voice and help us, maybe moderate what we are doing or modulate it and do it better. So, if anybody, youngsters who want to contribute, write into me. My mail ID is simple – PiyushGoyalBJP@gmail.com.

Panelist: Alright, Piyush Goyal, Deepali Goenka, Malvika, Ajay Banga, many thanks for joining us. Let me invite Chandrajeet Banerjee please say a few words before we wrap up.

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