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|January 25, 1999||
The Rediff Business Interview/ S Gurumurthy
'The clash with globalisation is going to produce a national Indian mind'
So, you feel that investors' money will not be protected.
I don't want them here. Who are they to protect our money? Who wants foreign FIIs to come? Ask the stock market operators. They will tell you that unless the FIIs get out of India, the stock market in India will not revive.
But people say it was only because of the FIIs that the stock market is going up now.
They will pull down in no time. The initiative is in their hands and they have invested about 5 to 10 per cent of the total investment in the stock market. With the marginal money, they are putting it up and putting it down. In both ways, they make money; our fellows lose, because we cannot 'outspeculate' them, with lesser resources.
So, you feel that the buoyancy you see in the stock market will change soon as the FIIs will be able to manipulate and....
They do it. It is not that they will be able to. They are always doing it. Actually the indexed scrips are not the coral index of the stocks in India. The most important group is the non-indexed scrips or what is called the B1 group. And unless the B1 group stocks go up -- there are at least 200 to 300 such highly under-priced stocks -- it will not matter. No foreigner will invest in that. There is no investment in the stock market now, there is only pure speculation. First of all, unless there is a reasonable number of long-term investors in the stock market, you can never recover; you cannot even speculate.
In 1991, after the liberalisation of the economy, when private banks were allowed to operate in India, many were scared. But nothing has happened to the nationalised or private Indian banks.
You have not allowed the foreign banks to open branches. Allow them to open branches and then see. If they are allowed to open branches indiscriminately, see what happens to State Bank of India. They will go for a six because all the premium accounts will go to them! Another thing is, foreign banks in India and private banks in India are not obliged to comply with the lending norms of the Reserve Bank. They need not have to lend to agriculturists. Is it not a shame on the idea of competition?
What have we achieved even though we were following swadeshi and socialism for the last 50 years?
Who told you in the first place that we followed swadeshi? We never followed swadeshi, we followed only socialism. Swadeshi and socialism are not the same. When we were opposing socialism, we were called CIA agents.
We didn't have any foreigners doing business here.
Not having foreigners is not swadesh.i Being Indian is swadeshi and socialism is an equally foreign idea.
Gurcharan Das said that swadeshi ideology betrays an inferiority complex.
I do not want to comment. They are mouthpieces of foreigners often duly compensated.
What he says is swadeshis do not have confidence in our businessmen. Won't our businessmen be able to compete with the foreigners?
You kill Indian business by socialism for 40 years, and on the 41st year ask him to compete with MNCs who have been fattened by centuries of wealth-making. An Indian businessman, a small-scale industrialist, will manufacture for 20 villages. Let him manufacture that way. He need not have to compete with Hindustan Lever to prove his quality or confidence.
Recently, Swraj Paul said swadeshi should not be protectionist.
Why do you want to take these people as authorities? What have they got to do with India? How many villages have Gurcharan Das and Swraj Paul visited in recent times? Do they know the condition of the Indian villages? Do they know how 75 per cent of the Indians live? Have they ever gone out of their air-conditioned rooms in summer?
You said foreigners would take over our economy. How?
They have already taken over half of the economy.
Where is the consumer electronics sector except for BPL and Videocon?
But are we not growing?
Where are we growing? Tell me. The entire economic policy initiated on the basis that imports lead to exports has failed in the last three years. Imports have gone up. Exports have come down. Production has come down and so too has employment. The entire post-liberalisation economic ideology has failed all over the world. Globalisation is being increasingly questioned. That is why George Soros has written that there is a crisis in global capitalism. But what is discussed abroad will be discussed in India only after two years. Because even in copying others, our intellectuals delay.
LIC and GIC have a headstart over the others and they have branches all over the country. Will the others be able to compete with them?
Basically you have tied down the feet of LIC and GIC. Like you have done with Indian banks. The others will not be subjected to the same investment restrictions. Now tell me where is the level playing ground? Indians are paying capital gains tax at 20 per cent but the foreigners are paying at 10 per cent!
The finance minister has said the new operators in the insurance sector also will be bound by the same obligations under which LIC and GIC function. Won't it be a level playing ground then?
I don't want foreign investors of any kind in this sector. Because it just is not needed. I want them as less as possible in the financial sector. Let us see what happens in the WTO when the very issue will be discussed in January 2000. See from this point. You have given 26 per cent and there you are starting at the WTO from 26 per cent. In what way are you intelligent? Why can't you start from zero in 2000? In a multilateral negotiation, with 26 per cent already in their pockets, they will take you to 51 per cent. This is what we are doing in all the service sectors. We have allowed up to 74 per cent in the advertising sector. For what?
Many economists give the example of a country like Singapore. It has a lot of foreign investments yet nobody has taken over Singapore.
We can develop 20 Singapore-like cities in 10 years. There is no problem in developing a city like Singapore. We can develop many Singapores in India but that is not going to solve our problem.
We have not been able to tackle our problems like...
...because we are following Western methods. China is following indigenous methods. They are doubling their agricultural production in 10 years. They are solving their problems.
Do you want India to follow the Chinese method?
Why should we follow the Chinese method? We must have our own methods to solve our problems. The Indian mind, because it has been serving the foreigners for 700 years, can only copy. Japan never copied anybody. Even when they borrowed the Chinese technology for development, they said it was the Japanese spirit with Chinese technology. Your education system itself is more like that. An Indian when he comes out of school never has the confidence that he can do anything on his own. How can this country do anything unless we change this foreigner dependent mindset!
What are your suggestions?
There is a very clear plan that is available to India. India needs 10 years of calibrated globalisation. This haphazard globalisation, opening here, opening there, without anybody discussing anything with anybody should go. We have no national debates. And all foreign-funded writers and opinion-makers and the press are confusing the people and corrupting the polity. This is not the way to progress.
You said earlier that you are angry with the English press. Why?
Yes, I am angry with the English press. The English press is bordering dishonesty in India. They do not know the real India. How many writers have gone to the villages and lived for at least one or two years? You must come from the villages to understand India. I want to create awareness among the English educated India. If India has a very powerful mind, we can handle the foreigner. If you know how to handle the foreigner, you know how to handle foreign investment. For example, at an Air-India counter you and a foreigner go at the same time. How are you treated then?
I agree, in my own country, I will be sidelined.
Are you not sick of this mentality?
But you have done nothing. You have not produced the Indianness in the mind of Indians. Then how do you handle such situations? With this state of national mind, you can't handle global forces at all.
How can we change the national mindset?
It will change in no time. The entire secular establishment collapsed on December 6, 1992. Although in a sense that was not the way it should have happened. That's how it will happen. Historic forces assert themselves. The clash with globalisation is going to produce a national Indian mind. We have to generate an economic-civilisational clash with globalisation. In the process, the Indian mind will generate its own native ideas. It is already doing. Indian civilisation is a reactive civilisation because it is influenced by satwa. Now it needs some rajas which will come only in a challenge.
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