Nirmala Sitharaman at Express Adda: ‘There can’t be a temptation now to experiment with a coalition govt. It’s a critical time for India’

On navigating the Russia and Ukraine conflict

I think the underlying point there is (that we have navigated this) without compromising on national interest and without in any way hurting the Indian economy. If sound arguments have been placed with each of them, whether it’s the Western Bloc nations, those expressions of Bloc no longer hold good after the Cold War, but still I’m saying whether it is developing countries, the Global South or the developed countries, or specifically whether it is the US, Russia or Japan. I think (it’s) the personal kind of relationship… One may say in diplomacy, there’s no personal relationship yet chemistry works, right? If the leadership has such chemistry with their counterparts, you’re able to reason out in favour of your country. And that’s where I think, truly, our Prime Minister has strenuously built up relationships with each of the leaders that at any point he is able to seek time, take the phone, talk to them, explain why he wants a certain thing done in our country’s interest and certainly not to hurt anybody else’s interest.

When that argument gets put effectively and that argument comes from an elected leader with mass support, who is building a stable economy with predictable policies, it shows results.

On the next set of reforms on agenda

I think you can be rest assured about the way in which Prime Minister Modi has handled the economy — as a Chief Minister in Gujarat and as a Prime Minister now for 10 full years.

You have consistently seen that he takes an approach of the government as a whole. It doesn’t work in silos. So if you brought in a policy, it actually gets on ground because all concerned are working towards the same goal. There is no pulling and pushing or people moving in different directions.

With that kind of a work culture, the one emphasis is on system reforms — whether you throw out unnecessary laws, whether you remove those rules which are bothering you, which are becoming an instrument in the hands of rent seekers. Everything is done looking at the opportunities.

Remember, even during the COVID lockdown, when we were announcing five mini budgets within a year, the emphasis was still on reforms. Even as we announced a package, we were undertaking two or three major system reforms. So the next generation reforms will certainly be on track.

Union Finance Minister Nirmala Sitharaman in conversation with P Vaidyanathan Iyer, Executive Editor, The Indian Express, and Anant Goenka, Executive Director, The Indian Express Group

On the upcoming Lok Sabha elections

India deserves better, our future generations deserve better. We missed the bus several times before, but we can’t now. Good strength in the Houses, both Lok Sabha and Rajya Sabha, will help India. There cannot be a temptation now to experiment with ‘Can it be a coalition government?’, ‘Can it be a lesser numbers government?’. No. It is such a critical time for India. It cannot be playing around with the numbers. We need strength in the House.

On consensus building

Everything is not in the court of the Union government. There are issues which are very peculiar to some states. I don’t want to pick up on an example. There are a number of them. Many things are happening in the states, and many states are doing it at such speed. It’s going to set the track for many others to follow. So it need not always be the Centre who does it. The consensus can come through the states.

Guests at Express Adda

On states in the South alleging the Centre was unfair to them

There are positives and points of achievement for all states in the South. There are issues because of the weightage that the Finance Commission gives for each one of these factors — have you got forest cover? What kind of population stabilisation has happened? So each one has a certain weightage.

Now when southern states sit with the Finance Commission, they’ll have to highlight it. If each of the southern states put the arguments well and convincingly with data in their hand, the Finance Commission is going to come up with a formulation. The Central government has no role to play in this except for obeying the Finance Commission. It tells me, you give this much per month and I have to do it.

There’s no way in which any Finance Minister, leave alone me, can tweak it in favour of one or the other. Even the wickedest Finance Minister can’t do it because it’s all there. It’s now getting into this very dangerous threshold of ‘southern states together’. You had a responsible Member of Parliament, brother of Deputy Chief Minister of Karnataka, say, ‘We’ll have a separate southern state’. It cannot go to that extent… I cannot for a moment stand next to anybody who says, ‘We in the southern states’, then demand.

Union Finance Minister Nirmala Sitharaman

On how Bengaluru’s business community is different from that in Mumbai and Delhi

They’re quiet. I mean (they’re like) it’s all right if Delhi listens to us but we can’t be bothered about going to Delhi. But because we are all very tech savvy, we’ll go about tweeting, ‘Hey, Central government, you’re not doing this, you don’t take care of Bengaluru. We are the next California’. Second time they don’t get a response (they say), ‘We are taxpayers, honest taxpayers. we give so much, why are you not listening to us? Can’t do this.’

So Delhi businesses think they’re very close to Delhi. They can come from Noida, they can come from Gurgaon, but Bengaluru doesn’t budge from beautiful Bengaluru, cool Bengaluru. Who wants to come to Delhi? Cold winters, polluted Delhi, hot summers and sweaty summers. But my God, they have the power of social media to thrash the government. Decent guys, but very powerful guys.

On if Bengaluru is up to taking the Artificial Intelligence challenge

They’re brilliant. The way in which Bengaluru and its immediate surroundings have given space to all kinds of startups to work, they may be focusing on agriculture, innovation on fintech, medical treatments, bio mix and also on the various kinds of technology which can be used in AI. The tools that you get out of AI, innovation on drones or aerospace, Bengaluru has done brilliantly on these startups. There’s no way you can bring another one to compete with Bengaluru. Hyderabad and Noida have seen the virtues of getting the startups. They’re also doing well. But Bengaluru has to be careful now. It’s like a race. You reach the top. That is one struggle. But to stay at the top is another struggle. And any small thing, sentimental or other things, can disturb that peace. We need to be extra cautious.

Union Finance Minister Nirmala Sitharaman in conversation with P Vaidyanathan Iyer, Executive Editor, The Indian Express, and Anant Goenka, Executive Director, The Indian Express Group

On corporate governance and top startups being in a spot

Incidentally, I’ve also had some representation coming to me. Only a couple of days ago, I had an interaction with startups, particularly the fintech ones. It was a fantastic conversation. They were very pointed, and voiced their concerns. It was more on regular support that they may need from the regulators, clarifications which are periodically required because their core business is not governance and compliance-related issues. They are fellows going about innovating in their respective areas but for keeping the compliance business going, they need to have a team which is looking after it, and that team needs the support. Otherwise, it stresses out those who are innovating. So it really cannot be otherwise.

The government is very much with these startups. We want to be sure that you will be given all the assistance because you intend to carry on with innovation. The compliances will have to be simplified and will have to be made user friendly.

On retrospective tax in online gaming

No, it’s been from the day when we had the first meeting in the GST Council about it. Strictly speaking, it is not retrospective. It is very clear, the notices have gone very clearly on what is the extent for that period. So there’s no obligation.

The Prime Minister is very clear that we don’t want to have any retrospective taxation, particularly in the gaming and other casinos and other things.

People who brought in the retrospective have been thrown out by the people of India. And the people who protested retrospective even being in the Opposition after coming to power, the first thing they did was to remove the retrospective and through the parliamentary process. So why have that lingering in your mind now? Our government was the first one to remove it. We have consistently been speaking against this when we were in the Opposition as well.

So retrospective and us don’t go together at all. If some other party was sitting in power today, you may ask them that question, not us. I think it’s a front.

On private investment

There is a lot of investment moving and happening in new sectors, like renewable. Look at the kind of investment which has gone for green ammonia. Look at the kind of money which is going for research in batteries and storage for power. Look at the way in which people are looking at semiconductors. Look at the investment in Rajasthan and Gujarat, for instance, on green hydrogen and in Gujarat, particularly in the Kutch area, for solar. These are not small investments, they’re huge. Therefore, I would think when we are looking at private investments, we should look at the sunrise sector. Also take them on the count. Look at the number of integrated steel plants which are expanding in capacity. Look at the advertisements which are coming from Odisha. You think that’s without money investment?

We should do a bit more rigorous understanding, work to understand what is actually happening. By the time observers or economic experts come up with the data, we have indications everywhere that things are happening.

Nirmala Sitharaman

On corruption and the role of investigative agencies

We are not corrupt. Tell me, otherwise would the media have left us free for 10 years? Prime Minister Modi’s garment is absolutely clean and I’m proud of it. But, equally, if they (investigative agencies) are going only to Opposition-led leaders’ places, tell me one place from where they’ve come empty-handed?

Agencies should not work? They will go after every fellow who has got black money… I don’t mind if they are doing it with white money. Let them get it (houses) anywhere. South Pole. Moon. Please buy it with tax-paid money. But if you go with other kinds of money, of course I’ll be after you. If we don’t, India will be put on the grey list of FATF (Financial Action Task Force). Once you’re on the grey list, your investments are not going to happen. Nobody is going to come with money in your country.

Union Finance Minister Nirmala Sitharaman in conversation Anant Goenka, Executive Director, The Indian Express Group

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QUICK QUESTIONS

Jobs, monopolies, privatisation, rural consumption, private investment. Which of these domestic issues are you most concerned about?

Private investments.

Russia-Ukraine, Israel-Palestine or China-Taiwan? Which of these three global issues are you most concerned about?

All three.

Pranab Mukherjee, P Chidambaram, Manmohan Singh, Yashwant Sinha. The one Opposition FM’s budget that you have studied closely.

I’ve read all of them closely.

Your one line of advice to the startup entrepreneur in Bengaluru today who wants to be a unicorn.

They’re doing fine and they will reach the level of a unicorn. They don’t need my advice.

The one lesson you’ve learned from China’s faltering economy in the last 10 years.

Be India. Be Indian.

Finance or Defence — engaging with Beijing is more challenging for which of these two ministries?

Well, after Covid, I have not had any opportunity to engage with China, so I can’t compare.

If you had a grandchild and she came up to you with her first paycheck and asked you for your advice on what she should do with that paycheck, what would you say?

Save it.

Guest Questions:

Jitendra virwani
Chairman and Managing Director, Embassy Group

Corporates in Bengaluru are helping the government improve infrastructure. We recently contributed Rs 100 crore to buy a metro station. But it’s painful to pay 18 per cent GST on 100 crore, especially when you’re contributing t0 infrastructure for the public.Would it be possible to not charge GST?

It’s a matter which the Council will have to take a call on. I assure you, I’ll take it up . I’ll take it up with the Council.

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Vishwaprasad Alva
Founder, Managing Director, Skanray Technologies

The PLI (Production Linked Incentive) scheme linked to R&D will bring Atma Nirbhar, but PLI linked to just production has got detrimental effects.

Leave the PLI. You’ve got one lakh crore given as seed money for R&D in the private sector in this budget. We are forming a SPV (Special Purpose Vehicle) and giving them 50-year interest-free money, one lakh crore, which they can in turn give to private R&D at any cost they choose. So when we are giving an interest fee for 50 years, they naturally will give it to you at a minimum charge to promote R&D. So we don’t just have the same PLI route, we have come up with something new.