Rahul Gandhi Interview: India Needs A New Economic Model, There’s No Other Way
Rahul Gandhi speaks at a campaign rally in Dhar, Madhya Pradesh, on May 11, 2019. (Photograph: PTI)

Rahul Gandhi Interview: India Needs A New Economic Model, There’s No Other Way

Congress President Rahul Gandhi said that there is no option other than to offer India a new economic model that reboots the economy from the current framework that was set out in 1991.

“You do need a new paradigm,” Gandhi told BloombergQuint’s Raghav Bahl and Sanjay Pugalia in an interview on the sidelines of a campaign rally in Solan, Himachal Pradesh. “We are faced with a tremendous challenge, as big as any we have ever faced, of a massive population, youth, and an inability to create jobs.”

Gandhi proposed making a two or three “global strategic bets” that should be “transformational”, along with working on deregulation.

A really big powerful bet is in completely rethinking about what healthcare is in India, and understanding that India has the capability to shape global healthcare.
Rahul Gandhi, President, Congress Party 

The second ‘big bet’ Gandhi proposed was a complete rethink on how rail and air transport works in India, and how material is moved across the country.

The post-liberalisation economic model worked reasonably well for India’s economy until 2012, Gandhi said, “and then it just collapsed.”

Watch the full interview with Rahul Gandhi here:

Here are the other highlights from the interview with Rahul Gandhi:

Ran 'Lean' Campaign; Did A 'Pretty Good Job'

Today has been the last day of the campaign and this has been your last rally. It has been 90 days of being on the road. When you look back, what’s the sense you get from the kind of things that you may have recalibrated or re-emphasised or done differently?

I think it’s been a learning campaign for me, like most campaigns. Overall, the Congress party has done a pretty good job. Taking in the amount of constraints we had, we had massive financial constraints when compared to BJP as everybody knows. So, it has been a good experience and I have learned a lot. You can find tuned things and there is always a better way of doing everything.

‘Window For Action After Results Not Limited’

This is the end of the campaign but next week there’s government formation. Yesterday, we heard from Congress party where Ghulam Nabi Azad has said that you are not going to be standing in the way…

I have made it very clear that we have to respect the opinion of the masters. The masters are these people (citizens of the nation). They are going to decide what is going to happen. So, anything which is said prior to that decision is premature. I’m not making any comments on government formation and any of that stuff. I’m very clear that they’re going to give their decision. The moment they will give the decision, there will be complete clarity. Before that, I am not going to insult their position and insult their status by saying I will do this or that. And that goes for the entire Congress party.

In terms of the flexibility of the Congress in trying to install a government which isn’t a National Democratic Alliance government, how flexible would the Congress be?

I am not going to comment on it until I have clearly, in front of me, the decision of the people of India. It will be insulting for me to start prejudging them and start commenting on what they are going to do. I will give an answer to that question on the 23rd. You can come for an interview then and ask me and I will answer how we will proceed.

Being the single largest party, if your rival goes to the Prime Minister to call them to form the government, then you need to preempt them. What are you going to do for it?

There won’t be a single largest party. If you are talking on hypothesis, I will do the same. There’s no question of being the single largest party. The government will form on the framework of people’s decision. They didn’t give their decision yet. Once they give the decision, everything will be clear. Wait for three to four days.

You may have a limited window. In Karnataka, we saw a very quick decision.

We don’t have a limited window. The window will be defined by what the people say. We cannot make those decisions right now, because we don’t know what people will say.

On the basis of a hypothesis, will there be a Congress lineage Prime Minster, South India Prime Minister or a Dalit Mahila Prime Minster?

You are asking me the same question in a different way. Let me put this in a different way. People will decide on the 23rd. People are the king. As soon as people decide it, we will answer your question. To comment on this now is like disrespecting them.

Current Economic Challenge ‘As Big As Any In India’s History’

You spent a large amount of time on the Nyunatam Aay Yojana, and it is a big idea which has been put forward in the manifesto. Welfare economics is very important for a functional democracy. I am a great supporter of NYAY. But the flip side of NYAY is that you need to have a massive amount of economic growth. All welfare economics is successful when the economy is successful. Otherwise, it is a drain on the economy. This country needs massive deregulation. Are you prepared for a new deal for our economy and not incrementalism?

I am prepared. There is no option. We ran an economic financial model in the 1990s, which worked in the 1990s. We tweaked that model. We didn’t develop a new model, but tweaked it into 2004 and it worked reasonably well with the tweaks till about 2012 and then it just collapsed. We understand and accept that the 1990s model is not going to work in 2019. Mr. Narendra Modi doesn’t understand it. He took Mr. Manmohan Singh’s and the Congress party’s ideas, abused them and then used them. He used them at a time when they just weren’t firing anymore. We got into trouble in 2014 because of those ideas. So, absolutely there has to be a new paradigm and a new approach. Of course, not to diverge from the past. You will not be going to see a complete divergence from the past. But you need a new paradigm.

We are faced with a tremendous challenge, probably as big as any challenge as we have ever faced. Challenge is a massive young population and inability to create jobs for them.

NYAY has two aims. The first aim is to send the message to poor people that, in the 21st century India will not accept poverty and it will wipe it out. Second is, to jump-start the economy and bring the economy to the point of solid growth.

Mr. Narendra Modi has sucked the money out of the economy. The economy is basically transactions. The number of transactions determines the economy. India’s strength is that we have so many people and we can have so many transactions. Mr. Narendra Modi destroyed transactions. He shut them down. Note-bandi, demonetization, Gabbar Singh Tax. He killed it. People talk to me about nationalism. But the most anti-national thing you can do is to destroy the Indian economy. Narendra Modi has done it.

Congress Will Implement Ideas Only Through Conversations

But that will only get us back to constraint economic growth that we have seen for 5-7 years. This economy needs deregulation on massive scale.

I am for decentralisation.

The kind of policies we have, 90 percent of India’s GDP is produced in the private sector. We are private sector intensive economy. All farmers are private. Small businessmen, shopkeepers, retail are private. Whenever the new government comes in, they come in with lot of ideas, but the bureaucracy captures you. Are you being able to break that standalone?

There are two things. I have been in politics for 15 years. Ideas are all good but in order to implement an idea, you need an ongoing conversation.

When they were talking about GST, we told them that don’t look at GST as an event. We said that forget Congress and BJP, if you view this as an event it will be a disaster. This is a process, a conversation. This is listening to people who are shouting and saying that we are in trouble. An idea should be shaped in and evolved through conversation. I am saying that the Congress party is bringing lot of ideas to table, but the implementation of those ideas will happen through conversation and all stakeholders should be part of that conversation.

Must Make 2-3 ‘Strategic Global Bets’

We have seen enough in this country that you come in for wanting transformation and you are trapped in incrementalism because that’s what the system is.

I think the way to look at it is to bring the ship back to where it was few years ago in terms of fundamentals. Institutional structure, the atmosphere, the removal of hatred and anger which Mr. Narendra Modi has spread.

Second is, start working on number of things which you are talking about like de-regulate, remove some of the red tape. And then think about two-three strategic bets which are global bets and not Indian bets or not a Himachal bet. Green revolution and computer revolution weree global bets. So, think about how India interacts with the world. Think about the world’s situation and say that these are the three bets which we will make. Hopefully one, or if we are lucky then two, will work. But they should be transformational.

I can tell you where some of these bets are. Big powerful bet is completely rethinking about what healthcare is in India and in understanding that India has the capability because of its unique nature and population to shape global healthcare. India can become the force that shapes the world’s health care.

Second is, the way we think about our railways and air transport network. The way we think about transporting material in India. There is stuff which can be done which can completely reshape this country.

Even a simple idea like corporatisation of railways which have been talked about for last 15 years. I am not talking about privatisation but corporatisation.

Those are tactics and how you get to the place. I am now talking more at a strategy level. I am talking about what are the steps India needs to take. For example, on use of Indian healthcare data. What oil is to Saudi Arabia, data is to India. Indian healthcare data will shape global healthcare. I am absolutely certain about it. Now, how do we think about it?

Exactly. And how do we do?

That will be a conversation. I don’t pretend to imagine that the answers reside in my head.

But even in existing structures.

In existing stakeholders, the answers reside, and the structures are part of the stakeholders.

There has been anxiety among millennials about their future in India. There are routine solutions and there is the insurmountable challenge of artificial intelligence and machine learning. On policy level, what are your thoughts on it?

Machine learning and artificial intelligence will help the structure of India if we utilise it in a proper way.

I will ask you a counter question. Narendra Modi has waved of loans of Rs 5.5 lakh crore of 15 people. From among Rs 5.5 lakh crore, how many are small and medium business enterprise? Jobs are created by small and medium businesses. You did demonetization and Gabbar Singh tax for them. But for them you have waived of loan of Rs 5.5 lakh crore. If you won’t give strength, protection and bank access to small and medium enterprise, then how will jobs be created?

‘Modi Proposing To Run The 2004 Model Again’

One of the biggest failings of the current government is that when they walked in, they where facing the twin balance sheet problem. The banks and companies where been in trouble. They did not recapitalise the bank when they could have in 2014. They did not rethink the banking institutions of India. Are you prepared for those kinds of big changes?

We are of the view that a new paradigm is needed. Narendra Modi said “Ek baar fir Modi Sarkar”. He is proposing to India that he will run the 2004 model again which is crazy. The inventor of the model Manmohan Singh told me that in 2012 this isn’t working. It has run its course and it has done its job. A particular set of ideas have a time frame in which they operate. Narendra Modi is re-firing it up and that’s why it is getting the response which he is getting. That’s why the response.

So, it’s going to be a conversation, a paradigm shift but it’s not going to be whimsical. It isn’t going to be “we’re going to build toilets”. It isn’t going to be Rs 15 lakh in bank accounts. It is going to be a conversation with the people of India, with the people who run business, farmers and stakeholders saying, “Where do we go? By the way, you are suggesting this. This is an excellent idea but sorry it can’t be done.”

So, that conversation is what Mr. Narendra Modi has stopped and that’s frankly what India is. India is not one man who comes in, gives speeches and what Mr. Narendra Modi does. India is 1.4 billion voices and we need to respect them. They will tell you what to do.

Congress party’s biggest challenge or crises is that 80 percent of its time went in human resources management, mismanagement and personnel management. It weighs down the leader to execute and plan the big picture. I didn’t see this problem being addressed.

Congress party is a conversation and there will be disturbance. Congress party leader’s skill is that there are lot of discussions happening and he needs to filter the main nerve. This conversation which you call it a disturbance, it’s voice of the country. If you listen to the voice of the country, then it isn’t disorganised, and it is disordered. For example, there is order in disorder and there is disorder in order. So, one can say that it is total disorder.

But also, one can say that there is disorder here on this level but there is order which is at a greater level. It is the nature of Congress. It seems to be disordered but its foundation is very much ordered.

In BJP, the problem is they place false order. They try to apply fake order on India and that order is hollow.

Modi Made Foreign Policy A ‘Circus’

On foreign policy, we have seen a paradigm shift under Modi government. They have escalated it to very muscular level like counter strike, air strike and then owning them and talking about them.

Not really. That’s not what has happened. What happened is Mr. Narendra Modi was given a clear message by China in Doklam and he went to China and bowed in front of them. That’s what actually happened. The Chinese were absolutely crystal clear. They sent a message to Mr. Narendra Modi in Doklam and Mr. Narendra Modi’s panicked and buckled and went there and had conversation there with no agenda, when there is a massive issue on a border called Doklam. No agenda. That’s complete submission.

Second is, he has taken foreign policy away from the experts. So, we did six surgical strikes, but Dr. Manmohan Singh didn’t do them. Dr. Manmohan Singh, the army and the strategic architecture of India did it. For Mr. Modi he has done it and who cares what the strategic architecture of India says and who cares what the Air Force says. I mean he is giving the Air Force people advice that we should not delay our strikes because clouds will protect our planes from the radar. I mean, where are we sitting. Mr. Narendra Modi, radar is designed to see planes. Please go and read little bit about modern radar or walk to the front of your planes and have chat with their pilots, they will tell you what’s going on.

So, he has taken strategy and made it into circus. Strategic thinking, strategic actions are not circuses. Strategic actions are done after thinking and a whole bunch of strategic actions are not spoken about ever. So we didn’t speak about surgical strikes.

But now that that has happened, and now foreign policy had moved to that notch where India has openly bombed a territory inside Pakistan. It has escalated to another threshold. The Congress foreign policy has been one of strategic restrain but now that has moved.

The foreign policy challenges of 21st century is pretty clear. There is on one hand, superpower which is the United States and on other hand there is an emerging superpower called China. There is confusion in Europe. There is fragmentation taking place in Europe and India has to understand and accept that it has a global role. It has to stand with China, with America as an equal. It can’t stand as subservient to either of these two powers. It’s a huge moment for the Indian nation. But India has to realise where its strength lies and where it isn’t strong. India cannot do what Mr. Narendra Modi does, which is not relying on the strategic understanding and the strength of India. That is true power and that is true understanding. Making these speeches and trivialising everything just to get a couple of votes, that’s not foreign policy. Foreign policy is going to the Indian establishment and saying, you guys understand it, I have a little bit of sense of it, tell me what you think. Not telling pilots, aces, that don’t delay your strike because Mr. Narendra Modi is a genius who understands radar.

You talked about China and America are the two poles. Will we be equidistant from both or we will be alignment with the Americans?

A political leader in India was once asked, does India lean left or right and she said “India stands tall”.

Also read: India Has Been Submissive to China Under Modi, Rahul Gandhi Says

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.