In this Idea Exchange moderated by P Vaidyanathan Iyer of The Indian Express, Union finance minister Arun Jaitley speaks about his equations with RBI, Gujarat’s new anti-terrorism law, the opposition to the land Bill, and explains where India’s Daughter went wrong.
Why Arun Jaitley?
The Union finance minister is the man at the forefront of Prime Minister Modi’s economic agenda. Amid talk of tension between the finance ministry and RBI over his Budget proposals, Jaitley has been repeatedly emphasising that there is no ‘disconnect’. At a function to mark the 80th anniversary of RBI, he praised the efforts of the central bank in improving macro-economic conditions. Jaitley is also a part of the core group of party leaders leading the government charge on the land Bill
P Vaidyanathan Iyer: The political opposition to the land Bill does not seem to be withering away. What is the outreach plan of the government ahead of the new session?
I can’t disclose the parliamentary strategy, but I can analyse the provisions. One, when the UPA drafted the 2013 Bill, they left out 13 areas, which they said were exempted. There are a lot of oversight issues. When you drafted those 13 exempted areas, you left out national security. It’s clearly an oversight. Now you need land for national security. You need land for nuclear installations, for your Army cantonments, naval bases, for Air Force bases. In fact, the areas that have been added are far more important than a number of those in the list of 13. The state government may exempt all or any of these purposes.
Appu Esthose Suresh: It’s been about 10 months since your government was formed. Both your allies and the Opposition are in confrontation with the government. Is there need for a course correction?
The Opposition could be in a make-believe confrontation. They were in a make-believe confrontation on insurance, on mining, and, ultimately, the argument completely fizzled out. After all, I have some faith in the system of parliamentary democracy.
Muzamil Jaleel: As a lawyer, what’s your view on the Gujarat Control of Terrorism and Organised Crime Bill, that was just passed by the state?
You first had the TADA, which was enacted by Rajiv Gandhi’s government. At the peak of terrorism in Punjab, and even in Kashmir, there was never a request to repeal TADA. TADA was repealed after the 1993 Bombay blasts. Then came POTA. In 2004, the UPA took a position that we will repeal POTA. The entire security apparatus of the country was opposed to the idea. Having repealed POTA, what did they do? After 26/11, the UPA brought 95% of POTA back. The Unlawful Activities (Prevention) Act was amended. Barring two sections, every section of POTA was brought into the UAPA. State after state started enacting organised crime laws. Every UPA state government—Maharashtra, Karnataka, Andhra—which asked for it was granted presidential assent. So much so that by notification, the UPA extended MCOCA to Delhi. But when Gujarat, Madhya Pradesh and Rajasthan asked for it, they said we will not grant assent. The plea they took was that “we have a cut-off date”, as if there was some scientific rationale to that cut-off date.
The Supreme Court has said terrorism relates to the sovereignty of India and therefore, it’s a Central subject. There are some overlapping provisions, earlier with POTA and now with the UAPA, so also the state law requires Central assent technically.
The notice arises out of a judgment of the Allahabad High Court eight to 10 years ago. In 1993, or in 1992, two FIRs were lodged, for the incident that took place in Ayodhya on December 6. The Allahabad HC divided the case into two parts. There is a process going on in Lucknow for FIR A. For FIR B, it’s going on in Rae Bareli. Recently, someone appealed that his case should be heard with the CBI’s case. This is not a new case.
Now on black money. In this Budget, I have announced that in order to be globally competitive, we should bring corporate tax down to globally competitive rates. So I have announced a bold step that the maximum tax will come down from 30 to 25%. The new law applies only to black money or income on assets you have abroad. So you pay 30% tax, 30% penalty, we’ll have a compliance window.
Liz Mathew: When the BJP came to power with a comfortable majority, the expectation was that the government would launch a reform agenda. But the debate in the past few months has been about attacks on minorities.
These are two different things. The reform agenda is on track and we are moving in this direction. As far as the BJP or the government is concerned, we have taken a clear position about these unfair attacks. The PM outrightly condemned such attacks in the strongest language. But then you should also be mature enough to distinguish between a crime and a hate agenda. In West Bengal, the rape of the nun seems to be a crime. If any of it is even indicated to be part of somebody’s political campaign, we will certainly take harsh action against him.
P VAIDYANATHAN IYER: On the monetary policy committee, how will you ensure that RBI autonomy is not diluted?
I believe RBI has done an excellent job in the areas that have been assigned to it. We are not going to do anything that impacts its autonomy. Whatever issues are pending in Parliament as part of the Finance Bill, I will comment on them when they are raised in Parliament.
Surabhi: You mentioned strategic sale of PSUs in your Budget. How do you plan to go about it when your officials are scared of a CBI inquiry?
The Prevention of Corruption Act was drafted in 1988. Some of its provisions, since it is an Act from the pre-liberalisation era, require a relook. And your question itself indicates honest decision-making cannot be subjected to any penal action. Whether it is disinvestment or defence purchases, because of the kind of interpretation that has been given to some of the provisions in Section 13 of the Act, they have been great deterrents.
Surabhi: You have a huge target of Rs 40,000 crore for disinvestment and strategic sales this year.
The past year we did manage to achieve the largest disinvestment ever. Hopefully, this year we should be able to move further. The ability to move further depends on the answer to your earlier question.
P Vaidyanathan Iyer: You have taken a number of steps to improve ease of doing business. The rupee has held on against the dollar, while it has appreciated against others like the euro. Do you think it is time to weaken the rupee to give a boost to exports? And do you think it’s time to further cut the rate of interest?
That will always be a subject of debate—whether you need a strong rupee or weak rupee. Rupee should realise its real value and stabilise on its own value rather than the RBI weakening it or strengthening it. At present, the dollar is a very strong currency and most currencies have been weakened by the dollar. There are very few currencies—the Indian rupee and the Swiss franc—that have been able to withstand the dollar at the moment. Therefore, let the market determine the value of our currency.
liz mathew: Kiran Bedi and Delhi elections have been a huge setback for the party. What are the learnings that you would highlight for your next state elections?
One of the reasons impacting the Delhi results was that people wanted to experiment with a new alternative. The other factor was the complete decimation of the Congress and the shifting of their votes to the Aam Aadmi Party. Delhi probably was the only election where we wanted the Congress to get a certain number of votes.
Coomi Kapoor: ICDS was formed to help pregnant mothers and infants get nutrition. But you have drastically slashed the Budget and blamed it on states.
This is a myth. No expenditure has been cut. The Finance Commission recommended that 32% will go to the states (their share of Central taxes) and 68% will come to the Centre. But now, 42% will go to the states. The Finance Commission says a large number of these schemes should be sent to the states directly so that they can decide. We divided the schemes into three parts. The Centre is going to fund most of the schemes. Eight schemes have been sent to states which they will fund. The schemes that have been sent to the states have not been abandoned. The enhanced resources of the state will fund these. The third category, of schemes which are either 50:50 or 75:25, we will fund.
Shailaja Bajpai: Do you think banning India’s Daughter was a wise decision? Second, on the Censor Board controversy, one of the things then CBFC chairperson Leela Samson argued was that the whole process of the Board should be re-examined. Isn’t there a simpler way of doing certification?
I am a part of the government. So I stand by the decision of the Home Ministry. But I have a slightly different perspective. The issue of ban is a matter of debate. In fact, in the Justice JS Verma memorial lecture, I had said that in today’s world, a ban or censorship does not work because technology defies it. I do believe that the film seriously violated not only Indian law, but also the law of the country from where BBC is operating. We made a lot of song and dance about the Verma Committee’s recommendations after the Nirbhaya rape case. Having amended our laws, should the film have disclosed the photograph and name of the victim? It is an offence under Section 228A of the Indian Penal Code. Second, both on propriety and the legality of allowing a forum to a rapist during the pendency of his appeal in the Supreme Court to argue why he is not guilty… if the BBC had done it in a crime in Britain, the courts would have restrained them.
My policy is not to interfere with the Censor Board. I read about these controversies. And I requested my MoS to go and meet them. A very clear message has been conveyed that this is a certifying agency and you have to certify keeping in mind the guidelines that exist and we do not want any unnecessary controversies. With regard to the film, where they said that the ministry had interfered, I have never spoken or allowed anybody to speak to them regarding what to certify and what not to. We have created a judicial tribunal with a retired lady judge who has a high reputation. If anyone has a problem, they can approach the tribunal.
Maneesh Chhibber: There are allies of yours who are not on board on the land Bill—the Akalis and the Shiv Sena. Will you be able to bring them on board?
They will be certainly on board.
Maneesh Chhibber: While in the Opposition, you were a strong votary of not giving post-retirement jobs to judges. What do you say about the appointment of a former CJI as governor and now attempts to get him into the NHRC as chairman?
On a matter of principle, my views are the same even today. Nobody should have a desire for a post-retirement job. Realistically, you will have to find an alternative to the system where some of these assignments by law are to be given to retired judges. So the only alternative you have is to have sitting judges to chair these posts. If you are a sitting judge, then the level of accountability is much higher.
Sushant Singh: Are there any priorities in the defence ministry which you handed over to Manohar Parrikar? And does the government have a view regarding a new chief of defence staff?
I won’t answer the questions that are not related to my ministry. But I can tell you that defence purchases had slowed down and this was affecting defence preparation. I had come up with two-three ideas. One is making India a manufacturing hub. Another is allowing 49% FDI in defence manufacturing. Give a little bit of priority so that the Indian private sector matures as far as defence production is concerned.
Appu Esthose Suresh: What are your views on opening up the media industry for foreign investment?
When we were in government earlier, during the Vajpayee government, this 0 to 26 (hiking FDI in media to 26%) was done by us. At that stage there was a strong group in the media which was opposed to it. Thereafter a large number of them who were opposed to it started entering into investment arrangements themselves.
Transcribed by Naveed Iqbal & Pragya Kaushika