‘Economy will come out of the slump far stronger’ – The New Indian Express

Express News Service

Former Odisha-cadre IAS officer turned entrepreneur Ashwini Vaishnaws election to Rajya Sabha from BJP with a seat gifted by BJD took everyone by surprise. Handpicked by Prime Minister Narendra Modi and backed by Chief Minister Naveen Patnaik, Vaishnaw, though, has donned the new role with aplomb. He speaks toSN Agragami on his journey, the state of economy and Odishas growth and development.

Bureaucrat, technocrat, private secretary to former PM AB Vajpayee, corporate head to entrepreneur, and now a politician quite a career journey it has been. How would you describe it?I think the variety of experience has given me humility to recognise the complexities of modern world. This journey has helped me understand how countries like China, Japan and South Korea transformed themselves from third world to first world within a short span of time. Wharton MBA transformed the way of thinking. Working with Vajpayeeji gave me the privilege of understanding the world view of a great statesman. Working in industry has given me the satisfaction of creating meaningful employment.

We all remember in 1999, when internet was nascent in Odisha, how you used it to follow US Navy website for tracking the Super Cyclone. You saved many lives and your work was commended by National Human Rights Commission. Dont you miss public service?The satisfaction that ones hard work and enterprise is supporting fellow human beings is immense. I like the focus of working on one subject, but sometimes I do miss the opportunity to serve people on a much larger scale. Handling the Super Cyclone of 1999 in Balasore was a team effort. Every section of society, be it lawyers, politicians, journalists, businessmen or the common man, everybody supported the district administration. Almighty was kind that he made my team as the medium for saving thousands of lives.

Ashwini Vaishnaw was elected to Rajya Sabha as BJP candidate from Odisha with the ruling BJD giving up a seat despite having a brute majority. An unlikely candidate and an equally surprising gift by a political party to a bitter rival of the just concluded polls. Please, throw some light on it.I think this was amply clarified by the senior leaders of BJP and BJD. Rajya Sabha has many apolitical members, now as well as in the past. The not so common combination of public life and industry experience is considered useful for contributing to Indias growth story.

As a first time Parliamentarian, how has the experience in Rajya Sabha been?Rajya Sabha is a very welcoming place. Senior members are always eager to guide and mentor. While both sides debate vociferously within the House, the camaraderie outside, cutting across party lines, is a thing to experience. I think we have a mature democracy, and that is undoubtedly the biggest strength of our country.

You have been actively taking part in debates on the state of Indian economy. With the economy gripped by a great slowdown and stuttering on all fronts, how do you view the scenario and the road ahead?I think Indian economy will come out of this slowdown far stronger than ever. Bank balance sheets have purged the toxic NPAs. GST has simplified life for industries. Culture of ever-greening bank loans is over. Corporate tax rationalisation will help in de-leveraging and creating capital for next cycle of growth.

Yes, there is a significant contraction in demand. But, this can be reasonably improved by the proposed annual investment of 10 trillion rupees in infrastructure.Indias nominal GDP is 200-210 trillion rupees. Inflation is benign at 4-6%. For real growth of 8%, nominal growth required is 12-14%. That means about 26-30 trillion rupees additional output.

Investment in infrastructure has a multiplier of three to four times. Therefore, with 10 trillion rupee infrastructure investment programme, we can aim at 8-10% real growth rate. Yes, it will take a couple of years to reach that level, but it is definitely doable. I think we need to work more on our ability to execute projects by removing the archaic tender processes, giving much more freedom to operating teams, and by having a robust contract enforcement regime.

I think the infrastructure investment cycle has started picking up and it will start showing the results by Q4 of FY19-20. Some sections of politicians and academics are proposing greater transfer of money directly to people by way of increased spending in MGNREGA, etc. In my view, that kind of short-term solution will only lead to inflationary pressures without increasing long term productivity of economy.

There is a growing sense that the Modi Government is not doing enough to pull the economy out of the slump. The much-touted 5 trillion dollar economy target by 2024-25 now seems an unapproachable target.I do not agree. Government is continually listening to the needs of all sections of society. Look at the frequency and speed at which Union Finance Minister Nirmalaji has responded to every situation. We must realise that the structural changes of cleaner banking, GST, and greater transparency do take time to be digested by the system. I think that process has matured by now.

There is one more thing that we definitely need to do to attract manufacturing industries. We need more manufacturing to create employment for our teeming millions. I think if we abolish the Dividend Distribution Tax, then a large number of manufacturing businesses will come to India. This distortionary tax is a big deterrent. The effective tax rate on returns on equity is still 40 per cent despite the historic Corporate tax cut. In my opinion, the abolition of DDT and foregoing `41,000 crore revenue would have had greater impact on attracting manufacturing businesses than the `1,45,000 crore revenue foregone by Corporate tax rate cut.

You began your IAS career from Odisha with stints as Collector of Balasore and Cuttack. As an entrepreneur too, you are still connected to the State. As MP representing Odisha, what is your vision for development and progress of the State?Odisha is my karma-bhoomi. Lord Jagannath is kind to give me opportunity to serve this holy land and its people. Odisha has the highest potential to be 1 trillion-dollar economy. A combination of coastline, steel, power and aluminum industries can lead to humungous industrial growth in ship building, heavy engineering, automobile, fabrication, petrochemicals, and host of other heavy industries that can generate multiple downstream and upstream ancillaries and generate huge employment.

Tourism, handicrafts, traditional handlooms, food processing, marine, and spices industries can provide the bridge between the old and the new. In my view, Odisha has the complete spectrum of industrial activity combined with the cultural strength that can lead to economic growth with stable society.

Read more:

'Economy will come out of the slump far stronger' - The New Indian Express