NEW YORK: India’s minister of Finance, Defence and Corporate Affairs Arun Jaitley came down hard on Pakistan, speaking at the Council on Foreign Relations (CFR) in New York City, on Monday, terming the death sentence given to former Indian Navy officer Kulbhushan Yadav by the military in Pakistan as “unprovoked gesture of a military court sentencing an India to death without—through a kangaroo court process”.
Jaitley made the comment responding to a question after an interaction with Chip Kaye, co-chief executive officer of Warburg Pincus, who moderated the discussion at the CFR. Last year, Jaitley had spoken at the Asia Society, in New York City.
Jaitley spoke about India’s improved relations with other neighbors in South Asia and Southeast Asia, including Bangladesh, Sri Lanka and Mynamar.
Jaitley didn’t mince any words, however, lambasting Pakistan as the neighbor who posed a danger not only to India, but to the world at large with their overt links to terrorism and terrorist organizations.
“Obviously, our problem comes from our western neighbor. And it’s clear what’s happening, that tensions do persist. And we do expect the international community, and particularly because most acts of terrorism across the world will have some footprint on the other as far as their neighbor is concerned,” said Jaitley. “And if you’ve seen all our efforts over the last few years to normalize the relationship have—we’ve seen a reaction. The prime minister went there, and it was immediately followed up by an attack in Pathankot Air Base in India, then an attack on our Uri military camp. And now we have this unprovoked gesture of a military court sentencing an India to death without—through a kangaroo court process. And I think that doesn’t help the cause of peace in the region at all.”
Jaitley also acknowledged the uneasy relationship India has with China, despite the “developing relationship” boosted by growth in economic and trade ties.
“The border is still an unsettled border. And therefore in 2003, our prime minister—he had gone to China. I had accompanied him. I was a part of the government at that time. And we had a mechanism set up in order to resolve the—and define the border itself. And since 2003, that mechanism has not been able to come out with an answer. We believe that it’s important the border get settled, because that’s in the interests of regional peace. And obviously, you’ll have occasionally some issues arising because of that unsettled situation,” explained Jaitley.
Jaitley spoke on a host of other issues that the Modi government is dealing with, pointing out two important factors in the political environment in India, guiding new initiatives to grow the economy, to what Kaye mentioned as the “next $10 trillion economy”.
“Broadly, the aspirational class in India has become very large. And therefore, to the decision-making of the government there is a popular support. Election results have indicated that. The nature of discussion and public discourse in media indicates that,” pointed out Jaitley of the huge mandate the Modi government has got in polls.
Saying that the rush of protectionism enveloping the world has not brushed India, Jaitley said, on the contrary, the country was open to outside investment. He spoke at length also of the need to make India a more “insured” country, by opening the insurance sector to FDI.
According to Jaitey, “7 to 8 percent range is the absolute normal that we have” for economic growth in India.
“All our economic parameters in terms of fiscal prudence or fiscal deficit, current account deficits, inflation control, I think the figures have been quite encouraging. They’ve never been so good as far as India is concerned,” said Jaitley. “I do believe that at least for the next two decades, India needs this high level of growth if we are to reduce poverty and then cover up a lot of gap that still remains,” he added.
Jaitley specifically mentioned “three very important decisions” that would set India on the path to greater economic growth: demonetization, the GST, and the unique identity number, ‘Aadhaar’.
Jaitley lauded the demonetization move saying that “the impact of this action is that the entire currency, 86 percent of it landed up in the banks.”
He said: “The anonymity around the ownership of the currency disappeared. In transaction after transaction where cash was or substantial cash was the rule, that component is either disappearing or has rapidly come down. Keeping cash is now considered a risk proposition, because there are several other curbs.”
Jaitley said the GST will make the generation of cash in businesses quite difficult, and it’s going to result in “greater digitization of the economy, more transactions through the banking system, higher tax collections, more revenue, hopefully more money that the banks—low-cost deposits for the banks, which improves their own ability to lend. And I think it will take a long time before people realize the final trust, but a greater emphasis towards digitization.”
Jaitley said that “squeezing of the integration of the informal with the formal economy” would help India move from a developing into a developed economy, something which it had ignored in 70 years.
According to Jaitley, telecom has been India’s “big success story”.
“If we were to start marketing the change of life which has come about post-liberalization and deregulating the economy, and we were to talk of several success stories, telecom certainly would be one of the top success stories in India. And therefore, it’s extremely important for India to preserve and strengthen this success story,” he said.