Lord Meghnad Desai: 'India has got rising growth, falling inflation of a kind not seen before. It's absurd to claim an unemployment crisis as well'
Lord Meghnad Desai, renowned economist and Member, House of Lords, UK, spoke with Rohit E David about India's economy, Narendra Modi's moves, demonetisation and Vijay Mallya.
Q. You were once one of PM Modi’s staunch supporters. After demonetisation, your voice is less heard. Have you distanced yourself, following Modi's economic policies' fall-out?
Not so. I fully supported demonetisation openly in my columns in daily newspapers.
I had myself proposed the idea 10 years before Modi.
Q. What are the three economic missteps PM Modi could have completely avoided or done better?
Not many missteps as the economy grew by 7% on average for five years — and inflation is lower than for many years. Such stability in growth and falling inflation have never before been experienced in India. The growth has been higher in some years but also a lot lower during the 15 years before 2014.
The initial hitches in launching of GST could have been smoothed out. The RBI should have also provided new currency faster during demonetisation.
Q. Is India facing an unemployment crisis today? If so, who is responsible?
No — it is absurd to claim that.
If an economy is growing at seven per cent, for unemployment to increase would require productivity to grow at higher than seven percent (no evidence of that) or labour force participation would have had to rise sharply (evidence is that it has fallen). When this election is over, whoever wins will have to come to grips with the quality of labour market data as there are contradictory and dubious claims being made on all sides.
Q. There is constant comparison between the Congress taking on board experts versus the BJP where apparently, everything is decided by the PM. Do you think this is a fair comparison?
We do not know whom Modi consults. But the test is in the result, not in the academic degrees of advisers.
Modi relies on the IAS cadre.
Q. You live between India and Britain. Why is Britain being so churlish in apologising for Jallianwala Bagh? Would it be a loss of face?
The movement towards full apology is slow but this year, the issue has been widely debated in both Houses of Parliament and Theresa May has expressed regrets officially, i.e., from the dispatch box in the House of Commons. More may follow.
After all, no apology has been given for the Delhi massacre of 1984 yet.
Q. Do you think Vijay Mallya will be extradited from Britain soon?
Mallya’s extradition is not under Indian control. The UK has a very tough Human Rights Charter which has shielded many people from all parts of the world, including Russian plutocrats, Islamist terrorists and common criminals from abroad.
Mallya will be extradited as and when UK courts decide.
Q. Has racism or cultural isolationism grown in Britain as Brexit approaches? What does Britain's future look like to you?
Racism has not grown — but there have been attacks on all races and especially on women. But, on the whole, the country is calm. There are no riots on the streets but puzzlement about the failure of Parliament to come to a decision.
I expect Brexit to be settled by early May, so the UK can avoid EU Parliament elections. I am very bullish on the UK’s future. It has made a success of a multiracial society. A Muslim is London’s Mayor and another is Home Secretary. There has not been a Muslim Home Minister in India since Mufti Mohammad Saheb.
Q. You have written extensively on Bollywood and politics as well. Today, do you see a political thread emerging in Bollywood, like your tracing Nehru through Dilip Kumar?
I don’t get much time to watch Bollywood or any other films nowadays! Younger people have to ask the questions I was seeking answers to.