Suresh Prabhu, PM Modi’s sherpa for G20, speaks about the impasse over Sena joining BJP govt in Maharashtra, India’s stand on trade facilitation and why the coal allocation ordinance was ‘laudable’. This Idea Exchange was moderated by Anil Sasi of The Indian Express
Why Suresh Prabhu
Senior Shiv Sena leader Suresh Prabhu held the portfolios of industries, environment and power in the Vajpayee Cabinet. In the power ministry, Prabhu—a chartered accountant by training and former Lok Sabha MP—set the stage for crucial reforms in the sector. When the NDA government took charge in May this year, one of its first major appointments was that of Prabhu as head of a high-level panel on power sector revamp. Weeks later, PM Narendra Modi named Prabhu as his sherpa for the crucial G20 annual summit.
P VAIDYANATHAN IYER: Let’s start with your role as sherpa for the forthcoming G20 Summit in Brisbane. What is your impression of the global economy and the way India is placed?
I attended the meeting of sherpas (in Australia). A sherpa is supposed to be the representative of the head of the state. We had a very interesting discussion on many issues and India’s sensitivity on some of them have been taken on board.
COOMI KAPOOR: In the
Maharashtra Assembly elections, the BJP has emerged as the largest party, the Shiv Sena as the second largest, but so far there is no firm commitment on them coming together to form the government.
Normally, when we have a pre-election alliance, then automatically that formation will form the government. But where there is no pre-poll alliance, there must be some talk, negotiation. I suppose that must be going on.
COOMI KAPOOR: Are you confident that the Shiv Sena will be a part of the government?
I think that we will know about it very soon.
AMITABH SINHA: We haven’t heard much from the government on its climate policy. Is there any substantial change from the stand of the previous government on climate change?
You’re right in saying that there is a lot of confusion about what the climate change issue should be. India’s stand is that we must firmly stand with the UNFCCC (United Nations Framework Convention on Climate Change) and the Kyoto Protocol. There is a very interesting concept there: common and differentiated responsibilities. India hasn’t compromised on that principle. The second priority is adaptation because it is a big issue for India. I don’t think that is something other countries appreciate much. They want to talk about mitigation, mitigation and mitigation.
In the previous government, all good was intended, but there was very less action. This is typical. We say the right things but do not act on them at all. India should have been more pro-active. In Copenhagen, which was the last opportunity we had to clinch a deal, we lost out because we started supporting China. China cannot be equated with India. China is the largest producer, manufacturer, exporter in the world. Therefore, we cannot say that the same principle that we use to protect ourselves should be applicable to China just because China is a non-Annex I country. I don’t think we should have rescued China (in Copenhagen) in the manner in which we did.
ANIL SASI: Is there likely to be more pressure on India on the trade facilitation agreement (TFA) at the G20 Summit? Is that the sense you got at the sherpas’ meeting?
We have been able to put forward our position clearly. India strongly supports trade facilitation. But there are other points on the agenda as well, such as food security. So when the parties were signing the deal, you only signed something on TFA, not on food security. Obviously, India will object. India’s concern for food security needs to be addressed. So we said, make it compatible.
Santosh Tiwari: In the case of WTO’s trade facilitation agreement, India could have utilised the peace clause, but instead it seems to have jeopardised the entire trade talks. Is this the right approach?
India was among the founding members of GATT (General Agreement on Tariffs and Trade) in 1948. So it has been a very active supporter of GATT and then WTO. China joined WTO much later. So this one instance cannot be said to be affecting the credibility of WTO. First of all, we should be clear about what our domestic concerns are. This 10% agricultural support limit is based on the 1985-1986 prices. India has always been saying don’t try to extrapolate 1985-86 to some other formula, which the other country did not accept and has no logic. The other part is the stockholding. The previous government passed a Bill which requires that you now have to procure more to fulfill the constitutional obligation of food security. So public procurement will become far more important than what it was earlier. In this backdrop, what India has been saying is that you discuss these issues… The Doha round was touted as about development, but where are the development issues? If development issues are going to be put on the backburner all the time, and then you keep saying that we should not be the spoiler… Who is the spoiler of the party?
Liz Mathew: The BJP is of the view that Uddhav Thackeray acted as or considered himself Balasaheb by taking the decision of going alone. Was the Shiv Sena’s decision a collective one? Do you think it was the right decision to take at the time?
I was not involved in this process at all. So it is unfair for me to comment on it. Today, all I can say that what has happened has happened. It’s in the past. Post-election alliances only happen when there is negotiation. Belgium didn’t have a government for more than a year because they were negotiating. The new government will emerge through such negotiations.
Rajgopal Singh*: Recently, we’ve seen a drastic shift in the political canvas of the country. Your party had first-hand experience of the aggressiveness of the BJP and an aggressive PM. Has that aggressiveness been reflected on international platforms as well?
I don’t know what you mean by an aggressive PM, because if you really look at it, everybody had written him off before the election and said this was the biggest blunder. But people endorsed him and he got an unprecedented number of seats for the party in Parliament. Then he won Maharashtra and Haryana, and I’m sure he is on his way to win both Jammu and Kashmir and Jharkhand. If a country, including Pakistan, wants to do business with India, they would want to do so if the leader has a mandate. Globally, India’s standing in geopolitics and geoeconomics has gone up considerably ever since Modi became the PM. The prime minister, president and foreign minister of China, the second largest economy of the world, have already visited us. Our Prime Minister has met the head of state of the US, the largest economy. The third largest economy is Japan and the PM has already met them. In Pakistan, people will be happy to deal with a government on the basis of its strength rather than weaknesses. So a popular prime minister means a lot to the country’s foreign policy and standing. That is evident from whatever we have seen.
Rajgopal Singh*: In the near future, will anything be done about India demand for a permanent membership at the UN Security Council?
This is India’s long-standing demand, but it’s not a standalone issue. We talk about improved global governance of so many of these multilateral agencies, including financial institutions such as IMF and others. I think we should have larger participation by emerging countries—India, Brazil, Japan. The point I’m making is that it is not enough that we should get only Security Council. We must be in the Security Council for obvious reasons. We are the second largest population in the world and the third largest economy in Asia. So we have a right to be there and we should be there but we should not confine ourselves to the Security Council. It should not be a ceremonial position. It should be an effective organ of the UN family.
Pavan Burugula*: The Shiv Sena has been very strong in Maharashtra. But now that you’ve been outsmarted by the BJP, what do you think went wrong?
I think that analysis has to be done. It should happen at a faster rate than what the Congress did about their defeats.
Rakesh Sinha: What do you think has been the fallout of the recent orders on coal block allocations?
The way the previous government handled the coal allocation issue was very counterproductive. The objective may have been laudable in terms of looking for supply, bringing in competition, bringing in the private sector. But exactly the opposite happened because of the way it was handled. I must compliment this government for coming out with an ordinance in the shortest possible time. I’m not saying this is the ideal situation but this ordinance has more or less addressed all the issues, including how to open up in terms of new mining techniques with clear-cut timelines, how to ensure that the land gets transferred, how to make sure people’s investments are getting compensated, how to ensure that the public money that is stuck is safeguarded because there are banks linked to this. So all of that has been taken care of by the ordinance, including that some commercial mining will be allowed now. Everything has to be seen in context since there is no ideal world. In the real world, there is the Supreme Court judgment, in the real world there are challenges of money getting stuck, coal not getting mined… We need coal as we are importing 200 million tonnes of coal. We have 300 billion tonnes of coal, we are not mining enough. So there is tremendous pressure on our current economy.
P Vaidyanathan Iyer: G20 is looking at an additional 2% growth rate and India also hoped to grow 8 to 9% in the near future. Now that inflation and global oil prices are low, is it now time for a benign monetary regime?
We cannot have any static monetary policy or for that matter even a static fiscal policy. There has to be some co-relation between the two. But why was inflation in India high? Two reasons. One was supply-side constraints. That means the demand was rising but the supply was not keeping pace. Second was the imported part. Now that imported part is getting addressed, because the fuel prices are falling. These have come close to $85 a barrel. The other part is of increasing supply. How can you increase supply if there is no investment? But over a period of time I think we need a very dynamic fiscal and monetary policy. It cannot just be classical…
Rakesh Sinha: You are now a Sena veteran. Tell us how similar or different Uddhav is from Balasaheb?
They are two different personalities. One is a father, one’s a son. There are a lot of commonalities because they belong to the same family. The difference is that they are two different individuals.
Coomi Kapoor: You are not very typical of what a Shiv Sena leader is supposed to be. How did you get into the Shiv Sena?
I didn’t join politics as a career. I was a chartered accountant, a banker. I was also working with about 150 NGOs. Like all citizens, I used to always complain that this is not happening, that’s not happening… blame everybody else other than myself. That’s when Mr Thackeray asked me to contest the elections. I also got lucky because soon after I joined politics, I became an MP. Soon after I became an MP, I became a Cabinet minister.
Pavan Burugula*: Besides the good show by your party and the BJP, both with rightist ideology, the pro-muslim MIM has made inroads in Maharashtra. Do you see the political discourse in the state getting communally polarised like in Uttar Pradesh or elsewhere?
We cannot equate two different parties and call them rightist. Of course, Western media keeps calling the BJP ‘the Hindu nationalist party’. I once told one of their journalists, ‘Tell me a party which is anti-nationalist’. There is nothing wrong in being a nationalist party. If a party is not nationalist, then there is something wrong with the party and the people will always reject it. Now for the rightist tag. 85% of India is Hindu. The BJP and Shiv Sena have repeatedly said that they do not stand for Hindus in the limited sense… All those who believe in India are Hindu. But some parties, and I don’t want to name anyone, do not believe in India’s sovereignty. You cannot compare such parties with either the BJP or Shiv Sena.
* EXIMS students
& Suanshu Khurana