Washington: Coalition politics is a reality that the UPA government will have to
accept, says Finance Minister Pranab Mukherjee. On the sidelines of the
annual World Bank and IMF meetings in Washington, the Finance Minister
acknowledges that the government's success will depend on its ability to
take coalition partners along.
Speaking to NDTV's Sarah Jacob, the minister said there is no perceptible loss of faith in the India story.
Here's the full transcript of the interview:
had meetings over the last three days at the IMF and the WB and with
other Finance Ministers of BRIC nations and US Treasury Secretary
Timothy Geithner. Based on your interaction with foreign governments and
investors, do you feel that there is a perceptible loss of faith in the
Pranab: No I don't consider that there is a
perceptible loss, but it is a fact that world economy is going through a
difficult time, and economies are interdependent today. Therefore, if
there is major financial crisis, an economic slowdown, no country can
expect that they will remain totally insulated from the adverse effect
of that, so this is not the correct perception. Yes our growth has come
down. We had domestic problems also, but so is the story with many other
NDTV: So after the feedback you have
received from foreign investors are we likely to see any tangible
changes to the tax proposals announced in last month's budget? Do you
believe investors have misunderstood this or have succeeded in
dispelling their concerns?
Pranab Mukherjee: I think I
have clarified the position. First of all there are perceptions that
when the retrospective amendment is there with the date of enactment.
That perhaps all the tax cases will be reopened from that day. I told
them clearly that it is not the case. Firstly the amendment that has
been introduced is not substantive, it is clarificative in nature.
That's why it will have to be with the date of enactment, because it
expresses the intention of the legislature. The reopening of the cases
will only be for 6 years, because there are other provisions in the
income tax act where cases more than 6 years old cannot be reopened, so
there is no question of reopening the cases from the date of the
NDTV: So there will be no changes in your tax proposals? Pranab Mukherjee: No.
At a time when India urgently needs foreign investment to upgrade its
infrastructure and spur slowing growth, has the controversy over the
economic advisor's comments of no reform over 2014 been really bad
timing for you on this trip?
Pranab Mukherjee: No it's not
a question of timing it's a question of there has been a slowdown in
the economic reforms process. Some of the legislations are still
pending. We are trying to get the approval of various stakeholders, and
if they agree then it will be possible to get the legislation done
quickly. What he made is the comparison that it becomes easier to get
the legislations done if there is a single party majority, but if there
is no single party majority then we shall have to carry people with us.
It is as simple as that.
NDTV: Under these circumstances,
if you had to set three or four clear goals for yourself as FM for the
next one-year, what would they be?
Pranab Mukherjee: First
I would have to get certain legislations done. Secondly I shall have to
try to achieve fiscal consultation what I have indicated in my budget
speech. And third of course, which is very vital and important, that I
shall have to keep the inflationary pressure at an acceptable level and
moderate the inflationary pressure. These three-four objectives are the
immediate tasks for the short term, and long term of course that we must
achieve the higher growth target.
NDTV: But it's not
going to be easy to achieve this. You are likely to continue to face
opposition and will have to still deal with coalition politics What
would you be comfortable being judged on one year down the line?
It's not a question of being comfortable or being non-comfortable, I
shall have to accept the ground reality. Yes coalition is there, and
naturally coalition means it consists of various parties. Different
parties have different perceptions, and you shall have to carry all the
stakeholders who are part of the coalition government on both so we can
achieve the objective. It may take time, but except that there is no
NDTV: India has long held that BRICS
nations should to play a greater role in the governance of multilateral
lenders such as the International Monetary Fund. You spoke strongly
about this again in Washington this week so why did India support Jim
Kim for President against the developing countries candidate Ngozi
Okonjo-Iweala, who is considered to the "developing countries'
candidate" and who most economists believe was better qualified?
First of all we shall have to keep in mind that there is a way in which
the executive directors and the executive board of the World Bank
select the candidates. We considered various aspects. It is encouraging
that entries, important entries, outstanding entries are coming from the
developing countries, and it is not that they are not worthy to be
selected as the president of the World Bank, but when there are multiple
worthy candidates, only one will have to be chosen.