‘To say we are becoming regressive because we opposed FDI in one sector is not fair judgment’

In this Idea Exchange moderated by Assistant Editor Ravish Tiwari, BJP leader Yashwant Sinha talks about his party's stand on FDI, the Banking Bill and why he asked Nitin Gadkari to step down.

Ravish Tiwari: There is a paralysis in the BJP over allegations of corruption made against the party president. You have said that this image has dented the popular perception of the party. Do you still stand by it or are you convinced by the explanations S Gurumurthy has given about Nitin Gadkari's business deals?

Yashwant Sinha: I issued a statement on November 20 and that was way after the explanation offered by S Gurumurthy. In that statement, I asked Mr Gadkari to quit his post. But I also raised larger questions of probity in public life. Those issues have not been highlighted by the media. My purpose in issuing that statement—to start a larger discussion on probity in public life—has unfortunately not received the kind of attention I expected it to receive. As far as Mr Gadkari is concerned, I have made a point and I have not subsequently spoken to the media. That continues to be my policy.

Coomi Kapoor: Should the BJP president have more than one term because the original rules had provided for only one term?

Yashwant Sinha: It was a two-year term to begin with, which could be repeated for another two years. Then it was extended to three years and later, the party decided there would be no second term. Now the party in its wisdom has decided that the president could be repeated. It becomes very difficult to give a personal opinion on issues on which the party has taken a decision.

Sunil Jain: On the Banking Bill, you have opposed allowing banks to invest in futures commodities. Mr Chidambaram has said that futures commodities was cleared in another Standing Committee of Parliament. He also says he has spoken to Arun Jaitley and Sushma Swaraj and they both seem to understand the urgency of clearing the Bill. So where are we on the Bills?

Yashwant Sinha: The Banking Laws Amendment Bill was introduced by me in 2001-2. It was sent to the Standing Committee on Finance. It never returned the Bill with its report. UPA-I introduced the Bill in the Lok Sabha in 2005. It was referred to the committee on finance. I used to be a member of that committee. We gave our recommendations but the Left parties were opposed to its very name. So the government did not have the courage to bring it before Parliament. The Bill lapsed with the end of the 14th Lok Sabha. They re-introduced the Bill in 2011. It came to the Standing Committee and because they had included the recommendations of the Standing Committee, there were only a few issues left to consider. Section 8 of the Banking Regulation Act specifically prohibits banks from investing money in forward contracts in commodities. That has been sought to be amended by the new amendment which has been introduced by the present Finance Minister. I said in the Lok Sabha that according to our parliamentary practice, you cannot introduce a completely new concept in a Bill once it has been deliberated upon in the Standing Committee. You must send it back to the Standing Committee. Now

Mr Chidambaram seems not to be in the mood to send it back to us. I can tell you on behalf of the BJP that we will oppose the Bill if it has this amendment. If they delete that provision, we will go ahead with our support.

YP Rajesh: Why does the BJP, earlier considered a forward looking party with a difference, suddenly seem to have become the new Left?

Yashwant Sinha: I think this is a complete misunderstanding of our position. We have a track record of reforms when we were in the government. We have very clearly said that we are not opposing FDI as such. We have problems with FDI in multi-brand retail. To conclude that we are becoming regressive because we opposed FDI in one sector, will not be a fair judgment of our stand on FDI in general. I chair the Standing Committee on Finance and be it the Insurance Bill, the Pension Bill or the Banking Laws Amendment Bill, the Standing Committee concluded that given the post-2008 global experience, we should hasten slowly as far as the financial sector is concerned. And, therefore, we said that 26 per cent should be the rule for FDI in the financial sector beat. That is the position that the party has adopted.

When as Finance Minister I had brought in the Insurance Bill originally, it had a provision that 26 per cent will be FDI and the balance 23 per cent could be held by FIIs, NRIs, overseas corporate bodies held by NRIs, etc. FDI could be to the extent of 49 per cent. When we discussed this with the Congress, they told us that on pain of death you will not raise it beyond 26 per cent. So we had to cut out that balance 23 per cent.

When we were told 26 per cent and nothing more, we restructured the whole thing. Which was, that to begin with, we'll have 74 per cent Indian partner, 26 per cent foreign partner and then, after these companies have operated for 10 years and reached a certain stage in the operational process, the Indian promoter will go to the market and disinvest his equity, bring it down to 26 per cent. So we envisaged a situation where the foreign promoter will hold 26 per cent, the Indian promoter will hold 26 per cent and the balance 48 per cent will be widely held through disinvestment or through IPOs in the stock market. There are many in the Congress who tell me that that is a much better arrangement than raising FDI to 49 per cent.

Surabhi: If the Congress chooses to bring the Insurance Amendment Bill with 49 per cent FDI, will you support it?

Yashwant Sinha: No, we will not and we have made it very clear to them to go by the Standing Committee's recommendations. The pension reform issue was taken up when I was Finance Minister. We are in favour of pension reforms. The government brought in a Bill to give statutory status to the Pension Fund Regulatory and Development Authority. That Bill did not go through because the Left opposed it. They brought back the Bill and we have given our recommendations and sent it to Parliament.

Surabhi: When can we expect the standing committee's report on GST?

Yashwant Sinha: I have been holding weekly hearings on the GST Bill. Then Mr Chidambaram became Finance Minister. I'll make another general point here that anything Pranab Mukherjee did is now sought to be changed by the present Finance Minister, not merely the retrospective taxation legislation. I suddenly came across media reports that the Finance Minister was discussing GST with the empowered group of state finance ministers. The state finance ministers took a 60-member delegation to Canada and Japan to further study the GST. Mr Chidambaram opened fresh negotiations with them. So we asked the department of revenue whether they stood by the constitutional amendment bill as introduced or were they going to make fundamental changes in it. If the ministry says they are making fundamental changes in the design of the GST or the Bill, so be it. Then we'll respond. The delay is not in the committee at all. Delay is entirely and 100 per cent on the part of the government.

Coomi Kapoor: Why have you not gone to campaign in Gujarat and what are the BJP's prospects there?

Yashwant Sinha: Perhaps I am not considered a good campaigner which is why I was not invited to campaign. The party feedback is that we are going to do tremendously well, better than last time.

Sunil Jain: BJP doesn't want FDI in multi-brand retail. However, the government managed to get it passed. Given that Parliament decided FDI in retail should be allowed, is it fair for BJP to say that when 'we come to power, we will change it'?

Yashwant Sinha: When we asked for it to be discussed, the government said it's an executive decision, why should it need parliamentary approval? But we can't allow executive despotism. What is Parliament there for? Today you decide that this is a executive decision and Parliament has nothing to do with it, tomorrow, you'll say that apart from legislative decisions, we will discuss nothing. The way this entire scheme has been structured has problems. Government says we will leave it to the states to decide FDI, cities with a population of 1 million will be permitted to have these stores. Take these two conditions and take into consideration that many states have said no to FDI in retail. So it is a moth-eaten scheme to begin with. Who says Uttar Pradesh, which is against it, will permit Walmart to source from UP? On a decision where we feel that the country is not with the government, we retain our right to alter that decision. My experience with foreign investors is this: they have a single-point agenda about India at a given point of time. It used to be insurance when I was in the finance ministry, it is multi-brand retail today, it will be something else tomorrow. They set the agenda and say your reformist credentials will be judged on this one issue. I would say that the government of the day should not succumb to that pressure.

Maneesh Chhibber: On Coalgate and in the spectrum scam, CAG estimated huge amounts as revenue loss which have been somewhat disproved, for instance, by the recent 2G auction. What is the party view on these figures and do you think functionaries like CAG should get post-retirement jobs? For instance, it has been said that Vinod Rai is close to the BJP and could get a role in politics later?

Yashwant Sinha: That is a very unfair comment. Vinod Rai was not appointed by an NDA government but by this present government. If he has not turned out to be comfortable, then it is their problem. Nobody is promising anything to Vinod Rai. I think we are diminishing his dignity by even talking about this issue. On the loss figures he has given, I can only say these are presumptive losses. The auction for 2G that was done by the government has been criticised by the Supreme Court and my information is that even at the risk of receiving less money, the government wanted to prove CAG wrong. Therefore, the auction was not done properly. So we can't take that as the benchmark. CAG has repeatedly explained why he came to the conclusion that he came to. And we discussed this in the PAC. Why wasn't the report of the PAC allowed to be made public?

Maneesh Chhibber: Should those holding constitutional positions be barred from getting other posts?

Yashwant Sinha: Yes, I entirely agree. Those holding constitutional positions, High Court and Supreme Court judges, CAG, CEC, etc., should not look forward to any loaves and fishes for the rest of their career. And for the inquiry commissions, tribunals, etc., we should not have a retired judge, we should have a current judge. The sooner we get a blanket ban on constitutional figures getting further employment, the better it will be for our system.

Sunil Jain: After the nuclear tests, the NDA hired a lobbyist in America. Then why is the BJP equating lobbyists and bribing?

Yashwant Sinha: We hired a lobbyist in the US because lobbying is legal in the US. Lobbying is not permitted in India. You will recall the famous Bofors case where the matter about lobbyists and commissioned agents got highlighted. In the Defence Ministry, a decision was taken that there will be no lobbyists and commissioned agents, the government will deal directly with the party making a bid. Lobbying is not legal and unless it is very well regulated, as it is in the US, the dividing line between lobbying and bribery is very thin. This report is about opening of multi-brand retail in India and lobbying for that. There is no guarantee that the money was not spent here. Also why has Walmart suspended their CFO and many other officers? Because they found financial irregularities.

Ravish Tiwari: The last time there was an NDA government, it had 23 parties. But if you look now, in over 200 seats from Tripura to Kerala, you are virtually not there and your efforts to win over new allies have failed. So how are you going to emerge as a challenger to the UPA?

Yashwant Sinha: We were able to attract allies in 1998-99 but not in 1996. The change came about because we reached a critical mass in our own numbers and were clear that any government had to be formed around the BJP. So people then came and consolidated our position. If you attain that critical mass again, you will attract allies. Why was the Congress able to attract allies? All of this talk of secularism, communalism is rubbish. Other parties want to know what they will get, which of the two major parties is more likely to form the government. The critical number to my mind is about 180 seats. If the BJP gets that, then the Congress is behind. In fact, the Congress was able to form the government in 2004 with only 145. If we get 180 seats, we will get allies.

D K Singh: We are told that you are preparing a policy paper on direct cash transfer for the BJP. Do you think that this will be the game changer the UPA expects it to be?

Yashwant Sinha: There are many issues regarding cash transfers to be thought through but the most fundamental issue is that it has been politicised. If it is a game changer as the ministers described it, then that announcement should have been made in Parliament while it was in session. They made the announcement at 24, Akbar Road, which is the Congress party's headquarters. They said Rahul Gandhi will monitor the scheme. We have already stated that we are in favour of this scheme, which will cut out wastage but it has to be done in an honest, non-political manner. The government has started on the wrong foot by politicising it.

Transcribed by Naveed Iqbal & Dipankar Ghose

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