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Growth Prerequisite for Inclusive Growth

When Sameer tried to persuade me to accept the Skoch Challenger Award and we worked together for about seven to ten days, I thought this was going to be a light-hearted, fun event, but I am afraid there is too much gravitas. Let me try to lighten the mood first. Why a Skoch Award to a teetotaler? I think among the awardees – two distinguished women (Aasha Kapur Mehta and Ruth Manorama) who work among women, two distinguished bankers (T M Bhasin and M Narendra), two distinguished economists (Nitin Desai and Surjit S Bhalla) and a thoroughly professional civil servant who has brought about a remarkable transformation in Gujarat – I am the odd person out.

A politician is a child of opportunity. Everyone else builds his career brick by brick, but a politician takes his chances when he gets them. I think, N K Singh will remember when I first told him one never knows how long one will be at the batting crease. One could be bowled out, one could be caught in the slips, one could be out leg before wicket, one could be given a wrong decision by the umpire. So, as long as you bat, bat freely and score freely. I think that is the spirit of cricket in Delhi epitomized by both Virendra Sehwag and Virat Kohli and that is the way I think I have approached politics as Minister of Personnel, as Minister of Commerce, as Minister of Finance and now as Minister of Home Affairs. Please remember, every tenure was interrupted for one reason or another. My tenure as Minister of Personnel in a government which had a strength of 414 was rudely interrupted when the Bofors scandal broke out. After that it was virtually a lame duck government. The tenure of Minister of Commerce was broken by an investment of just Rs150,000. The Minister of Finance tenure was broken because my good friend Sitaram Kesari asked his driver to take the wrong (or right) turn and drove to Rashtrapati Bhavan to withdraw support to the United Front government. So, a political career is a career where one seizes opportunities.

The best opportunity was given by Dr Manmohan Singh. When he asked me to be Finance Minister, I was pleasantly surprised; in fact, completely surprised out of my wits. I remember saying, “I thought you were going to keep the finance portfolio.” He said, “No, I kept it for a day but it is meant for you.” I think the people I worked with at that time – the Finance Secretaries, Revenue Secretaries, Expenditure Secretaries, some of whom are here, the (Reserve Bank) Governors – I think all of us were passionate about growth. That is my abiding passion apart from law. I have three passions – one is law, one growth, and the third is my grand daughter Aditi. I think I am passionate about growth and all of us at that time were passionate about growth. I think this passion translated into ideas, into policies. We were severely criticised but we maintained course and those were the years when we returned growth of over 9 per cent for three successive years. Again, it was rudely interrupted on 15 September 2008 when Lehman Brothers collapsed. But we tried to pull things together. I did not have too long after that; I was moved to Home.

Once we can demonstrate that we can grow at a high rate over a long period of time, then I think it is time to sit down and ask how that growth be distributed and made more inclusive

This is the big challenge today – trying to make India secure. But I think even this challenge can be overcome only if we grow at a clipping rate. I know there is N C Saxena who has a point of view, which I respect. C Rangarajan has another point of view which also I respect. There are many in this audience, like Ruth Manorama, who may have different points of view. But I urge you to consider what this country would have been if we were growing only at 3.5 per cent a year. If we had continued to grow at 3.5 per cent a year, we would have become the poorest nation in South Asia and perhaps among the poorest in the world. It is important therefore that we grow. Once we can demonstrate that we can grow at a high rate over a long period of time, then I think it is time to sit down and ask how that growth be distributed and made more inclusive.

Imagine, if we did not have 9 per cent growth, we could have not increased the agricultural loan programme from Rs 84,000 crore (Rs 840 billion) when I first announced it to Rs 5,75,000 crore (5,750 billion) today. We could not have expanded the education loan programme, which today is about 50,000 crore (500 billion) rupees. We could not have rolled out MGNREGA to all the districts. Remember, it started with 130 districts but within 18 months we were able to roll it out to all 600 districts. We could not have announced an old age pension scheme; we could not have announced NRHM. Everything is possible if we have growth. Nothing is within our grasp if we do not have high growth.

If I have been able to contribute a little to making people believe that India can grow at a high rate, I thank all my colleagues who made possible that opportunity.


P Chidambaram Lifetime Achievement AwardP Chidambaram Lifetime Achievement Award

  • P Chidambaram is a rare combination of political maturity coupled with intellectual brilliance. He has the capacity to address any issue logically and consistently. His outstanding performance as a Commerce Minister, Finance Minister and Home Minister is a testimony to that. His first love though, remains law.
  • As Commerce Minister he dismantled various controls over imports and brought down the import duty very drastically. EXIM scrips were introduced by which additional premium was payable to the exporters. India moved towards the reform of exchange rate regime.
  • He introduced moderate rates of taxation that resulted in a rise of tax-GDP ratio. His term as Finance Minister saw the highest rise in growth rates in the Indian economy.
  • Chidambaram had the courage to notify Fiscal Responsibility and Budget Management Act. He rationalized the tax administration side by underlining the importance of information technology and introduced the requirement that companies have to file electronically.
  • He played an important role in introducing VAT. He ensured that tax administration is simple, straightforward and moving towards a system in which the rates are low, base is wider and exemptions are limited. The Direct Tax Code was completely re-written by him to become simple and easy to understand.
  • Chidambaram is keen on financial inclusion and believes in a banking system that is commercially viable. The big slew of items which began with Bharat Nirman programmes in terms of extending the reach of credit, rural road connectivity, improved access to agriculture and farming, many initiatives in the areas of education and health, all suggest that he was clearly seeking not only high rates of growth but seeking a more egalitarian society.

P Chidambaram

P Chidambaram is Union Finance Minister
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