Is there place for a swadeshi economy at this stage of global economic development?
The global trade regime is only a perception and not a practice of free trade. In reality, massively managed trade is taking place. Every country looks after its interest. America looks after American interest everywhere. India cannot be an exception.
How do you view the Indian liberalisation process?
Under the socialist regime, the establishment generated attitudes varying from dislike to hatred for the rich. People began to enjoy luxury and comfort in secrecy. When socialism was lifted, the objection to being and becoming rich evaporated. The sudden easing of restraints created a sudden urge for sudden money. The stock market boom, the scams, are some of the manifestations. Liberalisation is a transfer of more and more public space to the market—from state, society, family and community. I believe there is a limit to marketisation of India.
But will the BJP be able to reverse the current trend?
There is a primary difference between the BJP, the RSS and the SJM. While the former tries to address the current economic situation, we look at economic issues from a 25-year point of view. The BJP has to temper the current trends from the standpoint of wider national interest. Liberalisation and globalisation must be insured against prejudice against the nation.
What about foreign direct investment (FDI)?
Between 1991 and 1996, only Rs 18,500 crore has come in as FDI, about 5 per cent of the country's total investment. So though at best FDI can be of marginal assistance, the perception created is that it is the country's lifeline. Just as this country needs investment, the investors also need this country to invest in. But we lack the skill to negotiate. After some protest, in the power sector alone, costs have been reduced by Rs 18,000 crore. There is a bit of slavery in the press and bureaucracy which leads to a perception that FDI is a donation by good-hearted souls.
So will you demand the exit of foreign companies?
Let me make my position clear. There should be no controlling equity. Japan and Korea do not permit controlling equity. FDI in the consumer sector, including automobiles, must go. However, the methods can be worked out without being prejudicial to our economic interest. During the nationalisation spree of the '70s, Unilever was permitted to hold more shares. Something on that line can be worked out. And no FDI in the food sector. Because it infringes on our culture. Coca-Cola is not a drink but a sign of American machismo. The variety of Indian cuisine should not be supplanted by factory-produced junk.
FDI in infrastructure is a false promise created by Manmohan Singh. Even in the most developed countries, more than 40 per cent of infrastructure investment comes from the government. Private effort in infrastructure is a mirage.
The level playing field?
I think first we must have a mental level playing field. India can be essentially built only by Indians. But whenever someone from London comes to FIPB, he is given undue respect while Indians are not even treated professionally. Foreign companies operate at a low power cost, at a low cost of money. It is our duty to protect Indian companies.
Financial sector reforms?
Citibank makes a profit of about $150 million in derivatives and a net loss in its general banking operations. Should we change our system to suit this absurd reality? The rupee should not be floated. The South Asian crisis is a product of convertibility. There is no need to change our policies to suit this fluid situation.