‘Higher education is a problem... if the economy is to grow at 9 %, skills will become a constraint’

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: Hello and welcome to Walk the Talk. This is Shekhar Gupta and we are at the India Gate lawns, in the very heart of the babu heartland. My guest today is Montek Singh Ahluwalia, not quite a babu, an intellectual among babus and a babu among intellectuals.

That’s a good description.

We are doing this exactly at the halfway point of this government. So what is more interesting —the report card of the first half, or the plans for the second half?

Well, it’s a good report card. At the end of two and a half years, the government can feel pretty pleased on many dimensions. Of course, a lot remains to be done. That’s an issue we keep worrying about.

When we had the same conversation two and a half years ago, how did the picture look to you and as you functioned with the government, what surprised you?

The most important positive thing is that I had felt at the time that the economy had got to a position where many years of reforms had strengthened its potential. So I was hoping that economic performance would be good. And that’s clearly been the case. We’ve got a four year average of 8% growth which we’ve never had. That’s a pretty good performance. And on the macro side also, things have been good, prices have been reasonably in control although this year in the last several months there’s a bit of an uptake. The external sector which used to be a huge bugbear, has been completely outside the area of concern even though oil prices shot up. I think that’s an incredible success story of reforms.

You’ve said the external sector has done well. And what else?

I think we’ve made a start in infrastructure. When we spoke a couple of years ago the one big gap I worried about was the gap between what we need here and what we’ve got. I don’t think we closed the gap but we now have an operational plan and in each of the infrastructure areas there’s a lot of action compared to two years ago. Infrastructure takes time but whether you look at ports, airports, roads — there is action and more recently, in the railways. There are new projects, new ways of doing things and very big plans for investment.

Is that to your satisfaction so far?