Talks will Turn into Action
What would be the economic priorities of the government? This is the first election in which there has been more talk of economics than politics during the campaign. Modi highlighted almost all aspects of social economic development during his 500-odd rallies and innumerable social media communications. He talked about infrastructure, agriculture, gender issues, education, healthcare. I think in the first few months of the government he will be able to convert these statements into implementable policies. This is also the first time that a three-time chief minister of a state will assume the office of the prime minister. Having worked in all these sectors as a chief minister, he is familiar with all aspects. Therefore we should see in the shortest possible time, a policy on each of these. How can infrastructure be revived?. Modi has talked about bringing entrepreneurship and empowerment to the fore, rather than doles and giveaways. He has demonstrated in his own state that what people need is dependable and affordable power and not unreliable promise of free power. I’m sure India needs to create infrastructure to the extent of $10 trillion in three decades. It has to be paid for to make projects bankable and viable. Investment must come from domestic savings as well as from budgetary support but largely by payment of reasonable user charges. Plus, bringing new paradigm of thinking for infrastructure development is essential. We are probably the only country in the world which will create public infrastructure through large private investment of this magnitude. Providers of equity and debt need comfort that these should be viable projects. For that his new thinking will serve the purpose. Can the power sector be revived? Thanks to the Electricity Act 2003, as well as the blueprint for integrated power sector development, made during my tenure as the power min- ister, we have legislative and policy framework to take the power sector forward. Unfortunately, last decade we did not act on it to our own peril. We had launched for the first time in India, distribution reforms, to make power sector commercially viable. The mess in fuel supply could be sorted out very quickly so that stranded projects get operational and the plant load factor (PLF) increases quickly. Both will result in big payback to the banking system besides getting more electricity to the grid. What about roads and tolls? Toll has to be related to the capacity to pay by the users as well as the reasonable payback for the financing institution. We need to introduce new financing mechanism. When the life of the road is 25 years, I don’t see any reason why the financing institution should finance it in a way that money should be repaid in 5-7 years. They have 5-7 years deposits, so they want to finance it only for 5-7 years to avoid asset-liability mismatch. This puts unnecessary strain on the developer, necessitating him to charge higher user charges for quicker payback. We thus should introduce new instrument of finance, matching with the life of the projects. Your thoughts on linking rivers in the country? We need a comprehensive watermanagement strategy considering that agriculture, manufacturing, services, besides all the social sector development full depends on it. For that we need both demand and supply side interventions, and a bottomsup approach besides top-down. Honourable Supreme Court has directed the government to implement inter-linking of rivers project. I had submitted very comprehensive reports to the Supreme Court which was monitoring this project because of a PIL. I had started studies to deal with environment forests, social, political, economic legal, technological and financial viabilities of these projects, involving top national experts. Is there a conflict between conservation and development? The environment ministry’s primary job should be to protect the ecological capital of the country. No country that has ever developed in the world which has not leveraged on its human and ecological capital. So, to develop India, we need to tap this ecology without diminishing the capital. For that, we need sustainable development. The ministry has always come under severe criticism. Thus we need complete transparency in its functioning. I had started the process of putting all environmental clearances (and the decision-making process) in the website. Economic development is a priority too for the poor and thus the population and poverty both could be big challenge to environmental protection. Environment is under siege due to lack of poverty and population growth. Should the government have an integrated energy ministry? Narndra Modi, in my opinion, could be the first prime minister who has a clear vision on energy. Gujarat has developed the largest solar park in the world. Gujarat is also home to one of the fastest growing wind energy. Gujarat could probably be the first state trying to harness tidal energy. Modi has always been talking about energy security as a national priority. If we continue to import oil and gas and now coal, we could never be truly independent, and thus we need integrated strategy. The call of having an integrated ministry can be taken by the PM himself. How can the mining sector, especially coal , iron ore be revived? Mining is a necessary evil. No economic activity can be carried out or no modern living is possible without minerals being extracted. Any form of travel other than walking; any source of communication or any modern medical care is impossible without equipment and activity that are carried out through a primary mineral. Even bullock-cart wheels are made out of iron ore. At the same time mining causes huge costs to environment, there are social issues as people are displaced, and it can damage to underground water if not done properly. The challenge is how to do mining avoiding all these attendant costs. We need a modern approach, using better than the best in the world technologies and a transparent supervision and control over mining operations to bring about economic development sans these issues. We need to share some of the royalties from these minerals, not only with the states but with the local communities as well.