‘Boycott call for Chinese products a childish pique’

RATHIN ROY, director of the National Institution of Public Finance and Policy (NIPFP), will step down from his position in August, after a seven-year stint. In an interaction with Arup Roychoudhury, he speaks on the reasons for his resignation and his plans. Roy, who has also been a former advisor to Prime Minister Narendra Modi, says India will have to chart a plan to produce goods at a lower cost if it hopes to compete with China, instead of a ‘childish pique’ of boycotting Chinese products. Edited excerpts:

Is it just a coincidence that your resignation comes at the same time as the appointment of Urjit Patel as chairman?

The stepping down of Vijay Kelkar as chairman and appointment of Urjit

Patel, and my decision to resign are completely separate events. Dr Patel is a very worthy successor to Dr Kelkar, and I cannot think of anyone better to lead the institution and he has my full support. He is a man of great international stature, a former Reserve Bank of India governor, and most importantly, he has been a known friend of NIPFP. If anything, it is a negative that I am resigning at a time when I could have worked with Dr Patel.

Are there any particular reasons for this decision?

I have felt that I need to move on to new professional challenges and

“YOU HAVE TWO OPTIONS: EITHER YOU ACCEPT THAT YOU ARE GOING TO BECOME A MORE EXPENSIVE COUNTRY, OR YOU PUT IN PLACE A PLAN TO PRODUCE THE THINGS YOU TAKE FROM CHINA MORE CHEAPLY”

responsibilities, which would allow me to focus more on the policy work I do in advocacy, without the simultaneous need to manage a public institution and to be able to think and speak for myself. I have had to temper my individual views as they are inevitably associated with the views of the institution. Essentially, it is a question of whether NIPFP can survive as a public finance and research body whose principal clients are the central and state governments.

As a public figure in policymaking circles, you have been quite frank with your assessment and criticism. Are there things you want to say, which in your current position is prevented you from saying?

There are two rules to follow. You speak on issues and not on personalities. And when you speak about problems, you offer solutions. I think I have met both these criteria. I, however, have other things to say which go beyond the remit of the NIPFP as a public finance and macroeconomic institution. I believe a number of problems which India is facing today are not problems of this or that government.

Coming to macroeconomic issues, they say with crisis comes opportunity. Are there any reforms you would liked to have seen in the Covid pandemic and the resultant economic crisis?

I don’t believe that with crisis comes opportunity. When crisis comes, you deal with the crisis. In the process of dealing with it, you may get some opportunities. In 1991, dealing with the balance of payments crisis forced the then government to undertake liberalisation. I don’t think the situation is the same today. We have to deal with a crisis of a negative GDP growth for certain in FY21, both nominal and real.

The Prime Minister has called for ‘Aatmanirbhar Bharat’, and the recent tensions have led to calls to boycott Chinese goods. Can we actually do that?

We are not buying Chinese goods today out of any love for China.

Why are even our sewing needles manufactured in China? We are not able to manufacture even lowend products as cheaply as China. And therefore, it is a rational economic decision to buy something from somewhere when it is sold as cheaply as possible. If you choose not to do that, then your economy becomes more expensive and then your growth falls, and you lose. You have two options: Either you accept that you are going to become a more expensive country, or you put in place a plan to produce the things you take from China more cheaply.

What are your plans for the future?

I would like to stay in India and am in conversation with people, largely in the private sector. I also have concrete offers from overseas, which I am contemplating.