Karnataka assembly elections will be a watershed for national politics, says Jairam Ramesh, Congress Rajya Sabha MP, in an exclusive interview to CNBC-TV18, and added that he is ambivalent on Air India’s disinvestment but on privatisation of government banks, he opposed the move.
Speaking on 2019 polls, he said Congress party needs an ‘intelligent coalition’ to win the election.
There was a flurry of interviews that you did around the same time last year where you spoke about not just the electoral crisis for Congress party, you spoke about existential crisis for the Congress as well. Do you feel more confident today? Has the Congress party found its voice, found its feet, found its reason, its purpose?
The Gujarat election certainly has been a great morale booster for us. It was a moral and a political defeat for Bharatiya Janata Party (BJP) getting less than a 100 seats although arithmetically they formed the government after claiming that they would get 150.
The by-election results in Rajasthan were a great boost for us. The by-election results in Uttar Pradesh, we didn’t figure in the final equation but the fact that the BJP lost miserably in Gorakhpur and Phulpur also the adrenalin flowed.
So it has been a good period over the last couple of months and Karnataka, certainly will be a major watershed for national politics because I am confident that we are going to cross 113 mark.In that flurry of interviews that you did last year, you said that Karnataka is going to be the watershed and it could prove to be the political rebirth for the Congress party just as it was for the former Prime Minister Indira Gandhi from Chikmagalur.
Forty years ago in 1978, the sanjeevani came from Chikmagalur. I think the sanjeevani in 2018 could well come from Karnataka and I am quite confident – actually it came from Gujarat.
I think the Gujarat result was a great morale booster. Rahul Gandhi emerged as an aggressive campaigner, interactive campaigner which he has continued in Karnataka but the added advantage we have in Karnataka is that we have a strong local leader, we have a mass leader. Few mass leaders left in Indian politics, Siddaramaiah.
Today, the BJP is going to quite literally carpet-bomb Karnataka from the Prime Minister, to Yogi Adityanath to other star campaigners. You believe this is going to make no difference. You believe that the battle between the Prime Minister and the Chief Minister will work in the favour of the sitting Chief Minister?
I think the more Amit Shah campaigns, the more Adityanath campaigns, the better-off we will because the only campaign strategy they know is a polarisation strategy and Yogi Adityanath who couldn’t win his own seat that he has been winning for last five elections in Gorakhpur, is now going to come and be the savior in Karnataka.
The prime minister is making this into a PM versus CM contest. This is not a national election. It is an election for a state assembly and people forget that Karnataka has a long history; in December 1984 Rajiv Gandhi swept Karnataka, the Congress swept Karnataka in the Lok Sabha elections getting 27 out of 28 seats but four months later in the assembly election Ramakrishna Hegde, in March-April in 1985 got a decisive mandate.
So Karnataka has had a long history of differentiating national level politics from state level politics. This is a state election and people are going to vote for Siddaramaiah, people are going to vote for Congress and not for Modi.
What if, as some polls seem to suggest that it is likely to be a hunk assembly. There already seems to be a camaraderie emerging publicly now between Prime Minister Modi and Deve Gowda. Do you believe that the Congress could then be in trouble?
I think the more bogus thing in India than astrology is our opinion polls.
Unless they are in your favour?
I do not believe in these opinion polls a bit. Exit polls maybe little more authenticity but these opinion polls, I know how these opinion polls are done and having done a couple of them myself. Incidentally in 2004, the opinion polls that we did, Yogendra Yadav helped me out. It showed that the Congress is going to get 145 seats and we ended up getting 144. That was an honest opinion poll that we did.
Forget the opinion polls; the important thing is, the ground reality is we have a strong local leader, we have good narrative of five years of programme which people have seen in their lives. We have Yeddyurappa as Chief Ministerial candidate and the more Amit Shah talks about corruption, the more Modi talks of corruption and Yeddyurappa shows up or the Reddy brothers shows up the bankruptcy of the BJP shown out.
You do not believe it’s going to be a hung assembly?
I do not think it’s going to be hung assembly. As I said we will cross 113 mark. How much we cross 113 mark by – that is the real issue.
What has changed from the existential crisis in May of 2017 or June of 2017….
We have a long way to go.
So you are still in midst of existential crisis?
We have a long way to go. We are nowhere in Tamil Nadu, we are nowhere in Uttar Pradesh, we are nowhere in Bihar, we are very weak in Odisha, our position in the north east has been threatened in the last couple of months through both the election results and through some unconstitutional actions of Modi’s government.
We are not yet out of the woods. These are green shoots of a recovery so to speak; first Gujarat, then Rajasthan, Karnataka. Chhattisgarh has always been 1-2% battle. I think in Rajasthan there is a very strong current in favour of the Congress and in Madhya Pradesh, we finally got Pradesh Congress Committee (PCC) chief, we have got a campaign head, we have got Scindia, Kamal Nath, we have got rejuvenated Digvijay Singh and we are headed towards…
How critical is it to be able to get these combinations right. Gehlot and Pilot in Rajasthan, Kamal Nath and Scindia along with Digvijay Singh in Madhya Pradesh. How critical is it for the Congress to be able to get these combination right?
A: It’s a combination of youth and experience.
And Rahul Gandhi?
Congress president is the one who has butted the heads together, bringing youth and experience together, bringing the experience of Gehlot and the youth of Sachin Pilot or Scindia and Kamal Nath and Digvijay Singh.
I think we have to pull ourselves together. We cannot be complacent.
There is nothing automatic about anti-incumbency in all these states. We have to go out and slog. Remember, we have been out of power for 15 years in two of these three states.
You are right when you say that there is nothing automatic about being able to capitalise on anti-incumbency. I want to talk to you about the fact that there seems to be a change in strategy where local leaders are being empowered more whether it is Siddaramaiah or it is in Rajasthan...
Or Amarinder Singh in Punjab.
Is this now considered deliberate attempt on the part of Congress party to change the Sultanat model as you criticise?
The way to survive and the way to grow in the years to come is to build strong state level leaders.
But is this now a serious a realisation and is this going to drive strategy?
Gandhi has been talking about this. He has demonstrated, he has walk the talk with Amarinder Singh, with Siddaramaiah and with Gehlot.
I think the important thing is to project, to find new credible young faces in each of the states and build them up as leaders for the future.
This command and control top down model of political management will not work in the years to come.
Is the Congress a little less irrelevant than it was last year. You said that you are not out of the woods, a lot of work needs to be done in terms of being able to put your strategy, if I could call it the repair strategy, the rejuvenation strategy. Where are you today and what are the next steps?
We have a number of alliances in number of states. We have an alliance in Maharashtra, we always had an alliance in Kerala, we have an alliance in Jharkhand and we are talking to other political parties.
What you make of the possibility of federal front led by people like Mamata Banerjee, Kalvakuntla Chandrashekhar Rao (KCR) etc.
Everybody is jockeying for position but it is very clear that 2019 election is going to see either a BJP coalition, a BJP led coalition or a coalition in which the Congress plays the anchor or the pivot role. It is all positioning now. Every regional leader is positioning but Mamata Banerjee cannot get a seat outside West Bengal, KCR cannot get seat outside Telangana, MK Stalin cannot get a seat outside Tamil Nadu. The only political parties has national footprint; it’s the BJP and the Congress.
Is the Congress ready to play pivot which means also to be able to reach out to these political parties?
We did it in 2004. We had pre-polled alliance in 2004.
Are we likely to see pre-poll alliances?
We already have pre-poll alliances. I have given you example. We had pre-poll alliance in Jharkhand, we have had a pre-poll alliance in Maharashtra, we always have pre-poll alliances in Kerala; Kerala is the United Democratic Front (UDF) versus the Left Democratic Front (LDF).
We have had pre-poll alliance in Tamil Nadu in previous elections. So the Congress has given up - in 1998 when we had our conclave, we took the stand that the Congress is a natural party of governance and therefore we will not get into any alliances.
By 2003 in Shimla, Sonia Gandhi has changed the mindset and said we are open for alliances with likeminded progressive forces and that is what enabled us to come to power in 2004.
So ideally, I would like the Congress to get 272 on its own but one has to be realistic. The prospect of the Congress getting 272 on its own barring a tsunami in our favour doesn’t seem to be on the cards in 2019. So we have to have an intelligent coalition which we had in 2004.
Speaking of intelligent coalition and speaking of the electoral strategy for 2019, what is going to be the key divers of that strategy? If I was to take a look at what you released at the end of your plenary recently - poverty alleviation, agriculture, employment. What you talk about as far as the economy is concerned. It really is a carry forward of UPA-I and UPA-II. What have been the key lessons learned from that experience especially in UPA-II that you do not want to make mistakes as you get closer to 2019 especially on economic front. What are the big problems that the Congress found itself faced with on the economic front was fiscal profligacy; you were writing cheques that you couldn’t cash. Has that realization now sort of…
We cashed in – Rs 17,000 crore loan waiver, we cashed on Mahatma Gandhi rural…
Yes but at what cost?
think, you are reading on the situations on a completely wrong. I think between 2004 and 2014 we had…
Your former finance minister said that this was a problem? Chidambaram spoke very openly and candidly talking about the fiscal deficit issue?
We had an economic growth between 2004 and 2014 which averaged over 7.5% per year and it is that created the necessary resource base for us to carry out the loan waiver, the rural employment guarantee programme, the increase in the MSP.
I think 2019 issue is not so much UPA-I or UPA-III. The issue in 2019 is the damage that Modi has done both to the politics of the country as well as to the economy.
GST was a welcome u-turn by Modi but it was implemented in a very arbitrary and peremptory manner.
Demonetisation was a bad idea to begin with which created havoc by the way it was implemented and all the promises he made in 2014, most of them remain unimplemented, most of them remain in the words of Amit Shah ‘jumlas’. It’s not my word; its Amit Shah’s word. And we all know the damage that Modi has done both to the polity as well as to social fabric.
So the issue in 2019 is not the so-called fiscal profligacy of the UPA-I or UPA-II but it is the damage that Modi is causing to the polity and society of the country. He is the issue and the BJP’s track record of the five years is the issue. Not the track record of UPA over ten year period.
What specifically will you go after? What are the specific vulnerability that you will go out?
The false promises that he has made, the damage that he has caused, the worsening of the political temperature, and the damage that he has caused to the economy. There is a long list of charges; these are not charges, these are not allegations, these are realities that we are seeing in front of us.
So, every election is a combination of both what the incumbent has done as well as what our narrative is going to be and both the positive as well as negative content. You will hear about the positive closer to the election. You are not going to hear the positive from me today.
Let me focus on the narrative that you are likely to build. You along with Chidambaram were part of the sub-group that looked at the economic matters that the Congress party will focus on. I was looking at the promises that you make or assurances in your draft on poverty alleviation. How serious are you about putting together this 5% cess. For instance, to fund scholarships for below the poverty line children, for schedule caste and schedule tribe children because this is one of the proposal.
We will find. I do not want to get into specifics of this thing but we will find the resources for implementing the commitments that we made. In 2004 we made a commitment on employment guarantee act; we found the resources. We made a commitment on right to education, we found the resources. So when we come out with a manifesto closer to the elections, we will make credible.
I would imagine that this is a precursor to the manifesto. You talked about the NREGS, you talk in that document that you hope to take the earnings from 7200 currently to about 18000 per annum on par with minimum wages, you talked about loan waivers for small farmers.
All I can tell you is every promise that we have made in manifesto in 2004 and in 2009, we implemented. The one promise of 2009 which we couldn’t implement because of Modi was our commitment to introduce GST by 2010.
Unfortunately, we couldn’t do it. The standing committee took two-and-a-half years and then Modi, they did the whole exercise. That is the one big commitment of 2009 and we found the resources and the resources came because the economic growth, as I said averaged over 7.5% per year.
I think the manifesto is a document that you need to look at. You can pick and choose from resolutions that we passed, but I would give far greater credence and credibility to the manifesto because it’s a nature of a contract that we are entering with the people of India that if you vote for us, if you repose your trust and confidence in us, we will implement the following programme schemes which is what we did in 2004 and in 2009.
The manifesto is still distance away?
Let me focus on some of the issues that were contentious issues in your previous tenure – the land acquisition act for instance, you were involved with that. The resolution at the end of the plenary says that you will….
It’s contentious only for people who want to acquire land in an arbitrary, discriminatory and dictatorial manner. It is contentious only for them; it’s not contentious for the land owners or for the farmers. This word contentious that you use is a loaded term. If you want to acquire land without paying adequate compensation, if you want to acquire land without the permission of the land owners. Yes, it is contentious.
I am saying why I used that because a feedback from industry and you are well aware of this is that this is going to increase cost very significantly.
The land acquisition cost is no more than 3-4% of the total cost of project. This was not my estimate. It was an estimate made by a Kotak Mahindra report in 2009.
The second criticism was that this will delay things significantly which will lead time overrun and cost over rise as well.
Of course, it will add time and cost. We must pay the cost for adequate compensation and we must pay the cost for getting the permission of the land owners. We just decide that we are going to acquire the land. What is happening for the bullet train project? We just decide, the government just decides, Modi just decides that we will acquire this land and that’s it. There is no consultation, there is no participation, there is no permission of the land owners, you are going to throw them out; land is the only form of livelihood for millions of families.
I am sorry that this argument that it’s going to add cost and time. Of course, it is going to add cost and time but that is what we have to face because land is something that is owned by a large number of people as a form of social security, they would like to hold on to it.
Many land owners would like to give up their land as well. I am not saying that we are going to keep it in perpetuity but you must do it in a manner that gives them adequate compensation.
You must do it in a manner, in a democratic manner, you take their consent.
So why not let state decide, which is what they are doing at this point in time because in your plenary document you said that you will not allow states to dilute the original act?
The whole purpose of bringing the legislation is, this land acquisition is on the concurrent list and in a concurrent list, if there is a central law and a state law, the central law predominates. The state law can add to the central law, it cannot derogate from the central law which is what states like Gujarat, Telangana and a couple of states like Tamil Nadu have done. Rajasthan also tried to do it. To remove for example, the social impact assessment, remove some of the provisions of the written permission from the land owners. I think that is very retrograde. I do not think that is in the interest of the country.
Just because you want to implement a project immediately, go through the due diligence, go through the due process. Land has been acquired in an atrocious manner over the last 50-60 years by governments as well as by private industries.
The state of Rajasthan is sitting on 70,000 acres of land. There is no land shortage for industry. Rajasthan is just an example, its true in Maharashtra, its true in Karnataka and its true in every state. Government agencies are sitting on 1000 of acres of land. Why don’t they part with that land?
I want to talk about agriculture because that seems to be another focus area that the Congress will go after the government for not delivering the promises made to the agricultural sector.
Not just not delivering the promise but wrecking the agricultural sector by not keeping the pace of increase in the MSP. Rural wages have stagnated compared to what they were between 2004 and 2014. I wouldn’t say stagnated, the rate of increase has gone down very significantly and of course the big jumla of 50% over cost of production.
We are still waiting to hear from them on the MSP promise that was announced in the Budget.
I forced the finance minister in the parliament to admit that it is 50% over A2&FL (actual paid out cost plus imputed value of family labour) not 50% over the comprehensive cost. If it is 50% over A2&FL, already under the UPA government, many crops were getting over 50%. So what is the new thing that the Modi is doing?
What you believe is the need of the hour? Even if I said, loan waivers, it was done in 2009 by UPA, you promised that in your resolution as well but that is not going to fix the problem in the agriculture sector, that is the band-aid that you apply every time that there is a problem?
We need a band-aid too.
I am not saying that you don’t, but I am stressing that there needs to be more emphasis now providing a better deal, a new deal for the agriculture sector. Is that part of the thinking of the Congress?
Sure, we have to strengthen the foundations of Indian agriculture through investment in irrigation, through investment in infrastructure, which goes into agriculture but these are long-term solutions.
In the short run, you have to alleviate farm distress and how do you alleviate farm distress, MSPs is one instrument, wage rate is other instrument, procurement is third instrument, these are instruments that you have to use.
Loan waivers are short-term, quick fix solutions, which are required under specific circumstances.
So, we cannot rule anything out. It is a mix of both the short-term as well as the long-term.
Let me ask you about what the narrative is likely to be on some of the other issues. For instance the role of the public sector whether it is banking, whether it is defence.
The Congress party is a centre Left party. The Congress party is a party that believes in a public sector and thank God for that but it is a Congress party that brought in the private banks. You were raising the issue of banking. Do we believe in privatisation of banks? No. Do we believe in greater private participation in the banking sector? Yes. We are the party that first started the ball rolling for entry of private players into the insurance industry. Do we believe in privatising LIC? No. Do we believe in privatising the big ONGCs and the BHELs and the SAILs? No. Under any circumstances, No.
What is the plan then as far as possible strategic disinvestment is concerned?
These are all words. Why don’t you come out and say privatisation. We don’t believe in privatisation of banks. We don’t. Private banks will expand, obviously we are not going to stop private banks from expanding. Consolidation, maybe. This notion that we must have six banks or seven banks, who has come up with this formula. We must have only six-seven banks. So these are issues that have to be discussed but I can assure you, no Congress government is going to privatise our bank.
Congress governance will provide opportunities for private steel industries, for private aluminium industry, for private banks, private sector will grow, we are not going to stop the private sector from growing but are we going to take a national asset - are you going to privatise the railways? No.
If Air India doesn’t go through in the tenure of this government, will you give up on that plan?
I think that on Air India, jury is still out on Air India. I don’t think that this plan of this government is going to go through.
Look at all the bidders. Now, suddenly, I read a statement somewhere that experience in the airline industry is not a pre-requisite.
So, if I have Rs 5,000 crore and I am doing something else, I can go and buy Air India. They are opening the doors for a few well-known players in Bombay to come and buy Air India. That is very obvious because IndiGo has said no, Jet Airways has said no, I don’t know what Vistara and other airlines are going to do but it is very clearly, I think as far as Air India is concerned, I think we would certainly give it one shot at running it professionally, running it in a manner that we have large number of airlines in the world.
Singapore Airlines, a government-owned airline, Emirates is government-owned, Qatar is government-owned. So it is not true to say that government-owned airlines cannot be run professionally.
We haven’t had much luck with that here in India?
Till mid-80s, Air India was doing pretty well. It is after mid-80s, early 90s things started going haywire. I am not defending the position that Air India is in today - it is a tricky position to be in.
Do I want privatisation of Air India? I myself very ambivalent. It is in a difficult situation. Government should be spending money on education and health and not in bailing out airlines and what else.
So isn’t that a good enough reason?
Yes, but I am still ambivalent. I am not entirely sure that wholesale privatisation – I won’t for example one difference between what I would have done and what this government has done, I would have kept 26% with the government. It would have been a 74:26.
It is 24.
No, it is 76:24, it is a huge difference. 24 and 26 is a huge difference under the Indian Companies Act. If you have 24, you might as well be zero. 24 is a charade. 26% gives you a position of the board, you can move a special resolution, you are not completely out of the seat. With 24 you might as well have given up 100. This 24 is an eye-wash.
So you are saying no privatisation of banks, what is the answer then as far as bringing in more efficiency when we talk about running by public sector banks?
Why don’t you ask the same question on private banks? Why don’t you ask the same question on what is happening to this drama in ICICI Bank?
I am not suggesting that this is only a public sector bank issue.
This is a banking issue. It is a general issue.
No, but there is a larger public sector bank issue while we are hearing about issues on the private sector side as well today.
The private sector things don’t come out, the public sector bank things come out. Look what is happening in the ICICI Bank. Look what is happening in Axis Bank.
Yes, but it is public money that is involved.
Absolutely, whether it is private or public, it doesn’t matter.
What is the answer there then to be able to ensure efficiency, transparency?
Privatisation is certainly not the answer. I am very clear in my mind.
On Air India, I am ambivalent I told you, personally. Party may not be ambivalent. My personal view, I am ambivalent.
Ashoka Hotel, I believe in privatisation. I believe in privatisation of all these hotels, I have no business running hotel and so on but on banks, I draw a line.
I don’t think that we should be privatising banks. I think we should be improving the interface that the banks have with the regulatory agencies. I think government should allow banks to be more board driven although the board of ICICI hardly a model to be followed in the public sector.
I think we should have more professionalisation and greater autonomy of decision-making as far as the banking sector is concerned. I think these are complex issues, which have to be dealt with.
Should we privatise, should we not privatise – that is not the issue.
Let me broadly then ask you, in terms of the growth - MSMEs, exports, these are issues that you have spoken of in the plenary, what do you believe – most people say that we can do 6.5-7 percent on autopilot, how do we get to 10 percent. That is the question, that is the challenge, that is the dilemma, what is your answer to that?
I think we should be realistic. Why 10, why not 15%. These numbers that we pick up from the air, we must have some sense of what is the growth strategy that is fiscally sustainable, what is the growth strategy that is ecologically sustainable, a 10% growth strategy may not be ecologically sustainable.
You need a rapid growth certainly, you need inclusive growth and you need sustainable growth as well. Somewhere between 8-8.5% in my view, could be fiscally and ecologically sustainable. So we have to do much exports, we can do much but unless the world markets improve.
World is seeing a very strong recovery and India is not participating.
Yes, we are not participating in it for a number of reasons. Our labour intensive sectors have got hit, our MSMEs have got – which have been a traditional bull-walk of our exports have got hit and we have had protectionism particularly in the IT sector in the US and so on.
What I am saying is in the export thing, it is a combination of both domestic policy as well as external markets.
What would you like to change – there are several flagship schemes that the government has announced, some new versions of the schemes that you have inducted.
Mostly. One thing I give this government credit for – very catchy. We introduced in 2012, a horribly bureaucratic sounding scheme called Basic Savings Bank Deposit Account (BSBDA) and it became Jan Dhan Yojna. People relate to Jan Dhan Yojna, people don’t relate to BSBDA. So one lesson we certainly learnt for our new incarnation is when we introduce schemes, don’t introduce schemes with names like BSBDA, have Jan Dhan Yojna.
So in terms of naming, in terms of branding, in terms of marketing, they are superb.
They are superb when it comes to branding, marketing, communication, what are the other lessons learnt from the Modi government?
That is one of the most important lesson. Take something, package it beautifully and sell it as something new.
This happened not only with BSBDA but on a number of other programmes but I am not quibbling. I am not quarrelling with them. There is more in governance, there is more continuity than the government in power is willing to acknowledge and there is more change that the opposition is also willing to acknowledge. Governance is all about continuity with change.
I think Modi has refused to acknowledge – my problem with him is that he should acknowledge the continuity.
If he acknowledges that continuity, we may end up acknowledging some change as well.
You have written to Venkaiah Naidu suggesting that there will be a special session - I know that there is a letter that you wrote in your personal capacity to try and break the impasse that we are currently seeing in parliament, do you have supports within your own party?
Yes. This last session which got wiped out, almost three weeks that got wiped out, it was what Derek O'Brien very nicely called, it was a GSD session, Government Sponsored Disruption session. The Anna DMK, the TRS, all these parties were put up in the Lok Sabha so that the No Confidence Motion doesn’t come up and they were put up in the Rajya Sabha so that the discussion on bank frauds and other frauds don’t come up.
So, this is all government sponsored. I hope that when we meet again in the monsoon session, sometime in mid-July, the situation does not repeat itself. But why not have a special session, that sends the right signal that we mean business. I think the Congress party will undoubtedly agree if such a proposal was indeed made and if the government is serious.
Do you want to push this idea though with the Congress?
We already put it, the idea is now before the chairman of the Rajya Sabha. He has to decide. But it was very clear, the last session, the government didn’t want the Lok Sabha to function because there were a spate of No Confidence Motions and psychologically Modi cannot deal with a No Confidence Motion.
So four No Confidence Motions they had to somehow sabotage that and in the Rajya Sabha they didn’t want the discussion on the bank frauds and other issues. So very conveniently the Anna DMK and the TRS became their excuse.