#
When it comes to storytelling, more and more we want immediate gratification, there's
#
a character we care about, a conflict we want to see resolved, and after some delicious
#
anticipation, after a little bit of tension and waiting, we want the satisfaction of a
#
Damn, I just made that sound like sex, what the hell.
#
Anyway, I was making a point about storytelling, even when we are watching a long web series
#
across seasons or reading a book spread out across many volumes, there are always these
#
miniature arcs that keep us going.
#
In the real world though, some stories take a long time to play out, they can take decades
#
and there may never be resolution one way or the other, and I find great delight in
#
sinking into the depths of the many interlocking and complex stories of this real world.
#
Many of my long episodes are akin to oral histories, my guests relive decades of their
#
lives, and indeed our lives and our society and our world in these hours.
#
But these episodes are not entire stories by themselves and often link up with others.
#
Today's episode is like that.
#
On one hand, at over eight hours, it might seem long to you.
#
On the other hand, it's a small nugget of a much larger story, and what a story it is.
#
Welcome to the scene in the unseen.
#
My guest today is KP Krishnan and you're in for a hell of a ride.
#
Krishnan studied economics and law in the 1970s, joined the Indian administrative service,
#
served under many governments and retired recently.
#
That's a vanilla version of an elevator biography.
#
I can go in one step deeper and tell you that Krishnan had an inside seat in government
#
through some of the most momentous years of our republic.
#
He was a side player in the early 1990s when liberalization happened, playing a supporting
#
He was a key player when it came to economic policy under the governments of the authorities
#
and played an important role in many ministries.
#
He was part of the crack force that helped India deal with the 2008 financial crisis.
#
He was one of the driving forces behind much of our important financial regulations and
#
a key architect of great reforms like inflation targeting and our insolvency and bankruptcy
#
This conversation, recorded over multiple sessions in different cities, contains multitudes.
#
It paints a picture of a time in society.
#
It shows how the Indian state changed as the balance between society and the state shifted.
#
It is a heroic tale of a group of reformers who kept trying to make this country a better
#
It is an inside view of politics.
#
Krishnan has many, many anecdotes of leaders like Manmohan Singh, Chidambaram, Vajpayee,
#
Jaitley, Modi, etc, etc.
#
He also adds layers and textures to many stories you have heard before on this podcast.
#
A reform story, the recent story I told of a pensions crisis, the story of a lost decade
#
as we call it, now longer than a decade, the story of a politics changed.
#
You will also get an inside view of the gears of government.
#
How does a new IAS officer on the field function?
#
How do they function within a ministry at joint secretary level, at secretary level?
#
How do they manage the politicians they have to work with?
#
What kind of incentives do they work within?
#
If you want to know what the engine room of government looks like, this is the episode
#
It is a complex story of a remarkable man, driven by a sense of public purpose, combining
#
academic rigor with the ability to turn great ideas into great policy that is actually implemented
#
within a large bureaucracy.
#
It is a story of a man playing a long game.
#
But before we get to the long game, here's a short commercial.
#
Krishnan, welcome to The Scene on the Unseen.
#
I've been wanting to have you on the show for a long time.
#
Our mutual friend Ajay Shah keeps talking about you and all the time you spend working
#
together in the great work that you did.
#
And I'd actually like to start our conversation by taking you all the way back to your childhood.
#
You know, where were you born?
#
What were your early years like?
#
We've been trying to schedule this conversation for a while.
#
Part of the reason why I wasn't keen on the conversation is that, like many, I don't believe
#
I really have anything very interesting or useful to say to the rest of the world.
#
But I'll defer to your judgment.
#
And you think there's something interesting, useful, so be it.
#
My dad came to Delhi in the early 1940s from Chennai, what was then Madras, the Presidency
#
And there was an interesting, I believe, system of government appointments then.
#
So since we are talking about history, if you studied in one of the Presidency Colleges,
#
which is Calcutta and Chennai, you could show up in the British Secretariat if you had a
#
second division and above.
#
And without further ado, they will appoint you in the Imperial Government of India on
#
the strength of that certificate.
#
So he joined what was the Imperial Government in the early mid-40s in what was called the
#
Ministry of Works, Housing, Supply and Rehabilitation, which used to be in, I believe, a little corner
#
in the second floor of the North Block.
#
So our generation, subsequent to his job, he got married.
#
My mother and dad were in Delhi.
#
So our generation is entirely sort of a Delhi generation.
#
But those days, moms would go back home to Delhi to work.
#
So technically, I was born in Chennai, 1959 end.
#
But within a few months of my birth, we were back in Delhi, grew up entirely in governmental
#
Delhi, started in this place called Sarojini Nagar, then moved to this place called Netaji
#
Nagar, all of which now stand demolished, are getting rebuilt as newer government colonies.
#
And then eventually to another colony called Kidwai Nagar, finally ending up in a place
#
called Bharati Nagar, which is next to Khan Market, which is where my dad retired, which
#
is when I finished education.
#
So that's about the initial years.
#
My dad started in presidency as well, though obviously much, much after your dad, and he
#
ended up joining the IAS.
#
And I've done five episodes with your college senior, Ram Guha.
#
In one of our episodes, when he started talking about his college years and taking names,
#
I was like, man, all the elites of India who are the elites today, the famous people, they
#
And it struck me that one way in which perhaps the country has changed is that you had a
#
small group of sort of people lucky enough to be located wherever they were.
#
And they kind of ran India and they became, you know, because most of the country didn't
#
And wonderfully, that has, of course, expanded, you know, since the 90s and so on and so forth.
#
But did you also have that sense, like you mentioned that, you know, when you grew up,
#
you had other sons of government servants along with you.
#
Was there ever a sort of a sense of manifest destiny, not in the grand sense of that the
#
phrase might, you know, but just in terms of that, this is what we'll do.
#
This is, you know, this is a path for us.
#
It's an interesting question.
#
You talked about Ram Guha's batch.
#
You haven't heard about my batch.
#
This is, I'm just talking about not even a full batch of 1976.
#
This is 1976, St. Stephen's economics.
#
And let me just start with one section, which is 35 people, Kuvade, Dhananjay Yashwant Chandrachod,
#
current Chief Justice of India, Abhishek Manu Singhvi, perhaps among the finest constitutional
#
lawyers, Arvind Subramaniam, till recently Chief Economic Advisor, Government of India.
#
He's also been on the show, yeah.
#
Ajaypal Singh Banga, President World Bank.
#
Ivan Meneses, who was still recently, Ivan passed away recently.
#
You must have read about it.
#
The world's largest liquor company, Diageo.
#
He was the global CEO of Diageo.
#
And this is, I've not even completed one section.
#
The other section is Sanjay Kishan called J1, the judge senior most in the Supreme Court
#
after Dhananjay, Parag Tripathi, former additional Solicitor General of India, Vinayak Chatterjee,
#
who was till recently the founder, CMD of Feedback Ventures, which is a very large infrastructure
#
My own section, Manjiv Singh Puri, Foreign Service, who was India's ambassador to Nepal,
#
retired as Secretary to Government, Sudhir Ranjan Mohanty, Chief Secretary of Madhya
#
Note, it's not just government.
#
We are talking about government, academia, private sector, judiciary.
#
And Arvind Subramaniam wrote a famous obituary when Ivan Meneses passed away.
#
And it attracted a lot of attention, including what I thought was a piece in very poor taste
#
by Shekhar Gupta, where he somewhat more sort of in a sniggering way talks about what you
#
This elite, you know, the small number which constituted the elite of India.
#
I think the point to notice, we'll take the least of the achievers in this batch, namely
#
I went to a Tamil medium school in Delhi.
#
If I tell you the fees that I paid in the school, you'll probably not have me on your
#
The monthly fee that I paid was 38 paisa.
#
Okay, Tamil medium, government aided, affiliated to the Central Board of Secondary Education.
#
And the first ever time that we were taught in English in a classroom was in class six
#
The textbooks had become English by class six, but many of us had been taught only
#
in Tamil till class five.
#
So it was quite a difficult transition.
#
And 9, 10 and 11, and school ended at 11 at that time, if you remember, 9, 10 and 11 was
#
mandatorily English because it was CBSE exam common.
#
Modesty apart, with all of this, one got a rank in the CBSE final exam.
#
In this class that I'm talking about, the class of 35, and I have not even listed the
#
high court judges, given the list of Supreme Court judges that we had, everybody in this
#
class, Abhishek Singvi was a five pointer.
#
Ivan Meneses was a five pointer.
#
Dhananjay Chandra Choudh was a six pointer.
#
Parag Tripathi was an All India rank holder.
#
So the person that I mentioned, Ajaypal Singh Banga came from St. Edmunds, Shimla, they're
#
Vinayak Chatterjee was a five pointer.
#
And none of them actually came, or a bulk of them, let's say, didn't come from elite
#
Vinayak Chatterjee's father worked in a jute mill outside of Hooghly.
#
My father was a very middle ranking civil servant.
#
Parag's father was an academic in the Delhi University.
#
So I would put it slightly differently.
#
This was in India where you rose, quote unquote, if you had merit.
#
You may have a disagreement on, is this the right definition of merit?
#
Perhaps there is a good case to reconsider whether achieving 95% in school leaving exam
#
necessarily constitutes merit.
#
But if that was the agreed definition of merit, we all got in, not because our dads were big
#
folks or, you know, connected people, we got in because we qualified in whatever was considered
#
But it is sort of, it didn't stop there.
#
Many of us built on that.
#
And I don't think a lot of the names that I took have just lived on laurels of their
#
But having said that, retrospect, you know, in retrospect, I can't but sort of agree with
#
And I recall this brilliant statement which occurs in Manishankar Iyer's write-up, which
#
is on the centenary year of St. Stephen's, Manishankar Iyer sahab talks about their last
#
They are all lying sort of hanging around in the lawns of the college, four of them.
#
So one guy suddenly sort of literally wakes up and says, hey, what are we doing?
#
I mean, we're finishing MA, aage kuch karna chahiye.
#
He's almost in unison, the whole, you know, four of them responded, of course, we'll join
#
And he says, all four of us cracked the civil service, we joined the civil service.
#
The inimitable Manishankar Iyer has a brilliant phrase in his concluding part of the essay,
#
where he says, this was what was right about St. Stephen's, but this is what was wrong
#
That four of us sitting on the lawns of St. Stephen's decide that we want to join the
#
civil service and we make it, tells you something about the very narrow base from which the
#
country drew its elite.
#
So it's not as if, you know, Vijayawada or Dibrugarh or, you know, some part of Maharashtra
#
or Madhya Pradesh did not have people.
#
Probably even in the manner that I described, marks and merit and all that, I think in a
#
statistical sense, we must have been the top 1% of India in terms of access and privilege.
#
So I think there is something to be said about greater opportunities, greater equality.
#
So one couldn't disagree, but it was a very nice India that we grew up in because we competed
#
in what we thought were sort of fair manner and I thought we did well in that.
#
There's a great line by Manishankar Iyer and I haven't read Shekhar's piece, but I didn't
#
mean it in an accusatory way at all.
#
I mean, I was looking at different angles of it and one of them is that, I mean, Ajay
#
and I did an episode of our YouTube show about clusters of talent.
#
And in this case, obviously these people are there, as you said, because they have scored
#
this almost a selection effect, as it were, throwing together the brightest of the privileged.
#
And I wonder to what extent you succeed, not just because you're inherently both lucky
#
and brilliant, but also because you are with each other.
#
You know, what kind of role does that play?
#
Because there is both an opportunity and a danger there and the opportunity of course
#
is that you push each other to further excellence and you widen each other's horizons.
#
But the danger also there is that then you get stuck into narrow conceptions of what
#
the country is and the frames through which one looks at it.
#
And that carries this sort of own set of dangers.
#
I think you're very right.
#
Some of the strengths clearly were you drew enormously from each other.
#
The good part, and Arvind brings this out very well in that very short obituary where
#
he talks about, you know, notwithstanding the fact that at that point in time, incidentally,
#
Rananjay's father was the sitting Chief Justice of India.
#
It didn't matter, you know, I was the son at that time, the son of not even an undersecretary.
#
My father was perhaps just short of becoming an undersecretary.
#
So if you're talking about a hierarchy, he was perhaps seven, eight, nine positions below
#
if there is an equivalence to be drawn compared to the Chief Justice of India.
#
Yashwant Vishnu Chandrachud, the Chief Justice of India, a day or two after he was sworn
#
in actually came home and had a cup of tea with a cup of coffee with my mom and dad because
#
they expressed a desire that, you know, it was the first ever time that we had known
#
anybody of that order of seniority.
#
So in a very strange way, this was a very equal society.
#
It was not a very hierarchical society and, you know, parents apart, I had access to the
#
Chief Justice of India in a manner that is unimaginable in today's India.
#
I was Dhananjay's classmate and just to give you an example, Dhananjay and I were getting
#
ready for a moot court the next day within the class.
#
It was not a moot court competition.
#
We had a brilliant criminal law lecturer called Bhuvan Pandey.
#
Bhuvan Pandey used to run his class in that classic Harvard tradition of one would argue
#
for, one would argue against and then the class would jump in and he would jump in
#
and sort of resolve matters.
#
The two of us were to do or were getting ready for the next day's class, which is a very
#
famous Maharashtrian Bombay murder case.
#
It is State of Maharashtra versus Captain Nanavati, which subsequently became a very
#
I think it's called Rustam or something.
#
So we were getting ready for that case and we were sitting in Dhananjay's house, which
#
is 5 Krishnamen and Mark, the Chief Justice's house, we were discussing the knock on the
#
A very hesitant Chief Justice of India peeks in and says, I know Dhan doesn't like me to
#
interfere when the two of you are chatting.
#
You know, two young men gossiping, fathers shouldn't be eavesdropping.
#
I repeatedly heard Nanavati being mentioned and I know that you guys are doing criminal
#
So are you guys discussing State of Maharashtra versus Nanavati?
#
So we said, yes, sir, we are.
#
And he said, can I join?
#
Dhananjay protested saying, no, no, we are doing our stuff.
#
So why don't you keep away?
#
So he looked at me and said, Krishnam, you perhaps don't know that the public prosecutor
#
I said, the defense counsel was Ram Jait Malani and I won.
#
We won the case for the prosecution in the trial court in Bombay.
#
So can I teach you this case?
#
So he said, of course you must.
#
For the next four hours, the Chief Justice of India taught us and Nananjay was most disinterested
#
because he probably heard this some 50 times.
#
He took me through every step of that case.
#
Now can you get that kind of education for love or money?
#
Singhvi, who was then the Advocate General for the State of Rajasthan, taught us because
#
Manu's mom would produce the most outstanding Marwadi vegetarian meals you can think of.
#
And she loved feeding us and when you are 18, you can eat kitchenfuls of food.
#
So she would ply us with food and Dr. Singhvi, when he would come back in the afternoon for
#
lunch or in the evening, would tell us about the case that he is arguing at present, you
#
know, at that point in time in the High Court and the Supreme Court, Parag Tripathi's father,
#
the first ever academic member of the Law Commission of India, and now is recognized
#
as the person who almost entirely anticipated what became Keshavananda Bharati, the basic
#
structure doctrine, is something that Professor Tripathi covered in a famous oration in Bombay.
#
It's called the K. N. Telang Memorial Lecture, Kashi Nath, Triambak Nath Telang Memorial
#
Lecture, where Justice Gajendra Gadkar and Honorable H. R. Gokhale, who subsequently
#
became Law Minister of India, were in the audience, where Professor Tripathi expounded
#
on a very famous writing of his.
#
It's called Golakhnath Critique, where he spoke about what eventually became the basic
#
And our evening walk conversations would be with Professor Tripathi.
#
So you are living in a world which is, in a sense, was unimaginable then, unimaginable
#
Ivan's father was the chairman of the Railway Board.
#
He was also subsequently, you know, Defense Production Secretary.
#
And we do homework, a lot of our maths homework, the mathematical economics homework in Ivan's
#
house in Karzan Road, where often the elder Mr. Menazes would drop in and say, hello,
#
So the amount that we imbibed, not only in terms of knowledge, knowledge of law, knowledge
#
of constitution, but etiquette, how does one present an argument, the nuances of working
#
So this was great education.
#
So in one sense, one was hugely privileged.
#
In another sense, it also tells you how these structural, shall I say, inequalities later
#
turn out to be the cause of much larger inequalities in a nation.
#
I perhaps disproportionately gained, I guess, serious individualists would argue that many
#
had this opportunity, but didn't necessarily make the most of it.
#
You guys got the opportunity, you guys seized it with two hands and made the most of it.
#
So to that extent, there's nothing wrong.
#
You prospered because you worked hard.
#
So I guess there is some merit in both arguments.
#
So A, it got us great access.
#
It got us enormous knowledge.
#
It also got us connections.
#
These are connections that have, one has not, quote unquote, misused any of these connections.
#
Dhananjay is a friend, full stop.
#
He's a friend, but he's Chief Justice of India.
#
Sanjay Kaur is a friend, but he's a senior judge in the Supreme Court.
#
There is a social relationship, but it stops there.
#
Fortunately, I have never been in professions where, quote unquote, one could be accused
#
of misusing these proximities.
#
But I guess in a sense, those are possibilities that should worry us.
#
I think, you know, one, it's kind of silly to look back on the good fortune of others
#
You know, if you're fortunate, you're fortunate and it is what it is.
#
Thinking aloud, I have a question about this, which is that in modern times, through technology
#
and the force of will, can some of this access be scaled in the sense that back in the day,
#
how many young 18 year olds have access to these people you named?
#
But today, for example, there are ways by which you, someone like you, can reach out
#
not only to a bunch of 18 year olds you happen to know, but also to absolutely anybody.
#
Like in some senses, the show Ajay and I do, he's kind of looking at that, that we want
#
to expand the discourse for everyone who is interested.
#
It's a link, it's out there, and everyone should do this.
#
I'm not saying we are special, but everyone should kind of do this.
#
Having access to ideas and to discourse is a deep kind of privilege which possibly goes
#
even beyond wealth and money.
#
And I think one of our great problems is like, how do we solve for this?
#
How can we expand this?
#
So what are sort of your thoughts on this?
#
I mean, I completely agree with you.
#
I must confess that I was sceptic when it came to some of these, you know, use of modern
#
technology to scale, to quote you.
#
And I'll give you an illustration.
#
I am part of the Center for Policy Research, CPR.
#
I'm an honorary professor there.
#
I don't, I'm not an employee, but I've been an honorary professor now for over a year
#
As part of the 50th anniversary of CPR, Yamini, our wonderful CEO, absolutely outstanding
#
CEO, requested me to do a couple of podcasts, something similar, but focused.
#
It was on some specific aspects of public policy, specific aspects of governmental functioning,
#
the way the IAEA is structured.
#
Obviously, you know, it had to be anecdotal related to me, because it wasn't a general
#
It was about my experience in the IAEA, my experience in public policy and that kind
#
One had these conversations.
#
I wasn't sure if it actually adds value, the same diffidence that I displayed when we spoke.
#
But I was absolutely stunned by the reach of some of these, quote unquote, completely
#
free products which are available, because once it was recorded and put out, the calls
#
I have received, the emails I've got, completely unknown, you know, some back of beyond Coimbatore
#
writes an email seeking clarification on something I said and saying that I am planning to now
#
do this because of what you said.
#
And at one level, it's frightening because you could hear the right guys.
#
You could also hear, quote unquote, the wrong people.
#
So one has to have the discrimination, the judgment to be able to draw the appropriate
#
But I think on balance, the advantage of using technology to scale this experience, you know,
#
this wonderful experience of being able to sit with a Chief Justice of India, not in
#
his capacity as Chief Justice, but as the public prosecutor who did Nanavati versus
#
the state of Maharashtra, there could not have been a better lesson on what in the IPC
#
is called grave and sudden provocation to murder.
#
This whole case is almost the case on what constitutes, if I remember the section right,
#
it's 304A of the Indian Penal Code.
#
Can there be such a grave and sudden provocation of a human being that he or she ends up in
#
committing murder and this grave and sudden provocation is actually considered a mitigating
#
So this is the gist of the matter.
#
That lesson is imprinted in my mind because the person who taught me was perhaps the best
#
person who could teach it.
#
If that conversation could have been a podcast, I'm sure millions of law kids in India who
#
are now learning IPC would have had an experience which is unrivaled.
#
So I think this is one example.
#
I'm sure I'm not very familiar with all of the technologies of today, but I think these
#
blogs, these podcasts and a whole lot of similar things I think are very useful and I think
#
they'll be great equalizers of opportunities which wouldn't have been the case in their
#
And to add to that, I won't actually worry about the bad voices and the good voices,
#
however one defines it, because I find that the bad voices who are appealing to maybe
#
tribalistic instincts or whatever, appealing to the baser demons of our nature as it were,
#
get shallow engagement, whereas the right voices, and when I say right voices, I don't
#
mean people who necessarily agree with me, but just people who have a serious intellectually
#
honest approach to a question, they will attract a much deeper engagement.
#
And there is, I have found, the reason I do these long podcasts is that there is this
#
hunger for depth, because everyone assumes that everyone has short attention spans and
#
you got to keep it snappy and you can't go too deep.
#
Everything is a mile wide inch deep.
#
And actually I have found, to my surprise, that that is not true.
#
People really crave depth, they appreciate depth, they're willing to pay for depth and
#
they're willing to invest time and they feel genuine gratitude for depth.
#
Just now when I was coming to Delhi, it was for the 13th time in the last 14 times I have
#
been inside an airport, someone stopped me and said, are you Amit Verma?
#
Thank you for what you do.
#
And that is, in a sense, the greatest reward.
#
And I do an audio podcast, so I should not even, my face should not even be sort of familiar.
#
So I think that there is hope there and I wouldn't worry about the jingoistic,
#
nationalistic, simplistic, populist voices out there.
#
They are getting huge numbers and sensationalistic
#
numbers, but the engagement is shallow and they don't really affect the world.
#
For my next question, I kind of want to go back to
#
what you mentioned about the Tamil medium school.
#
And, you know, one phrase that I have been thinking about a lot,
#
which I first learned from Sugata Srinivasa Raju when he came on the show about a year back,
#
is rooted cosmopolitanism.
#
And my great lament is that I feel that I grew up in this bubble where I am cosmopolitan and
#
certainly a citizen of the world, but I am not rooted enough.
#
And sometimes I feel that is a loss and I tell myself that I must try to
#
read Hindi as well as I used to get back to all of those things.
#
And I have also found that among those of my friends and those of my guests
#
who have started studying in a medium other than English, I feel that in some senses,
#
their appreciation of the country has a natural depth and nuance
#
that many English speaking people like me otherwise don't.
#
And of course, you can acquire depth and nuance,
#
but there is a natural understanding and also an intellectual humility perhaps
#
that goes beyond when you have that.
#
So I want you to sort of tell me about culturally who are you and who were you growing up and how
#
did that matter because sitting in front of me, I see a, you know,
#
sway of gentlemen speaking wonderful English and et cetera, et cetera.
#
But take me a little beyond that.
#
That's a lovely phrase, rooted cosmopolitanism.
#
I'm glad I got to know this.
#
It is such a nice way of describing, I think, a lot of us.
#
I would also like to sort of maybe in passing, draw attention to some of the minuses.
#
You know, the Delhi that I grew up in, which is early 60s to about 1982,
#
when I left Delhi to 8283, when I left Delhi to go to Mussoorie for our civil service training,
#
the entire period was Delhi and of which schooling was entirely in just two areas,
#
Netaji Nagar, Laxmi Bai Nagar.
#
I went to a Tamil medium school.
#
This school itself was very interesting.
#
It was founded by a gentleman called Mr. Iyer.
#
We are celebrating 100 years of the school, not the particular school that I went to,
#
but the chain of schools that were founded.
#
This gentleman founded the school in Delhi and Simla.
#
Because the government then, the British government in the early 1900s,
#
would move to Simla during the summer.
#
A lot of the lower level clerks and middle level officers of the government were Tamil.
#
The other lot, I believe, was Bengali.
#
You had a lot of Raisina schools, Bengali schools,
#
which weren't necessarily Bengali medium, I believe.
#
But the Tamil school that this gentleman founded, Mr. Iyer founded,
#
he insisted that it be Tamil medium.
#
Now, I think the interesting school that came out of,
#
you know, a series of schools that came out of this experiment,
#
these were Tamilians, largely Tamilian Brahmins,
#
who had left what was then the Madras presidency
#
immediately after their, many of them after intermediate,
#
a lot of them after their undergrad, postgraduate, like my father.
#
Primarily because opportunities in the Madras province
#
were limited on account of reservations.
#
The self-respect movement in what is now Tamil Nadu,
#
old Madras, had started in the 1920s.
#
I now have a much better understanding of that movement than I did as a kid.
#
And all I would hear from the peer group of my dad
#
was that we all had to leave Chennai because of reservations.
#
You wouldn't get government jobs in Tamil Nadu.
#
You wouldn't get lecture positions in Tamil Nadu
#
because these were reserved for people other than Brahmins.
#
So a whole bunch of them came to Delhi.
#
And I don't know if you're familiar with this phrase,
#
Tamil Sanskrit word called Agraharam.
#
The word Agraharam means the Brahmin street.
#
So these old villages in Tamil Nadu,
#
including in Karnataka, in the south generally,
#
would typically be on the banks of a river.
#
And prime location, the road leading up to the river
#
and leading up to the temple would be the Agraharam,
#
which were largely Brahmin households.
#
These would be also the Gurukulas.
#
This is where the school would be located.
#
And over a period of time,
#
the Agraharams sort of became the center of learning,
#
center not necessarily of commerce or wealth.
#
Many of them had land, but they weren't really,
#
the top wealthiest, but they were clearly the elite.
#
They were the intellectual elite.
#
They were not wealthy, but they had enough money
#
to even take to modern education and all that.
#
That whole bunch, in a sense, moved out of Tamil Nadu
#
and effectively they recreated Agraharams in Delhi.
#
So the Delhi that I grew up in was actually very monocultural.
#
A lot of dad's friends were first the Tamilian Brahmins,
#
but he was a very cosmopolitan person.
#
And since he was working in government of India,
#
his number two was a gentleman, Lakshmi Narayan Sehgal.
#
His fellow section officer was Nandaji.
#
Now, Nandaji would happily eat chicken on his table.
#
Dad was a strict vegetarian, but not fuzzy enough to say
#
that if Nandaji is eating his chicken, I won't eat my curd rice.
#
He was sort of modern enough, quote unquote,
#
to have his curd rice, insist on having only his curd rice
#
and let Nandaji have his chicken in the neighbouring table.
#
And in the evening, Nandaji would have his drink
#
and dad would have his coffee.
#
So in that sense, cosmopolitan, but quote unquote rooted
#
in the sense that he was still essentially an Agraharam person.
#
So my Geneva, for instance, was done at the age seven.
#
Now, in 1967, this had stopped happening in most Agraharams
#
in Tamil Nadu, the place where we came from.
#
And I think like all migrants, and this you would see
#
when you see migrants in Africa, the Indians who went there,
#
they are probably frozen in the time that they left India.
#
So a lot of their practices would still be what they inherited
#
from their grandparents and from their parents, and they are insular.
#
So therefore, there is no other influence.
#
And what they inherited from their grandparents
#
is what the grandparents took away in the late 1800s or the early 1900s.
#
So I guess the Tam-Bram community of Delhi was sort of 1940s Tamil Nadu,
#
1950s Tamil Nadu, those practices, some of which were extremely good, rigorous practices.
#
For instance, every evening in our house, there would be a Panditji
#
who would come and teach us scriptures, you know, Shlok.
#
I can recite hundreds, hundreds of Sanskrit hymns,
#
which kids who now go to Gurukulas can't recite.
#
And I was going to school, come back, 4.30, play cricket, 6.37, cricket or hockey or football,
#
whichever is the seasonal game. That's another thing in Delhi.
#
You played cricket in the winters, you played soccer when there was a World Cup soccer,
#
and you played hockey when there was an Olympic hockey,
#
and you played Kabaddi when the Indian team went into the Olympic Kabaddi final or whatever.
#
But 6.30, you have to come home, wash your feet, wash your hands,
#
do what is called Sandhya Vandan, which is your evening puja, chant the Gayatri,
#
and sit and learn. And we used to, you know, you couldn't protest, but we would be very unhappy.
#
Then the rest of the kids are having a good time watching maybe television in somebody's house.
#
You have to sit and learn the Shlokas. But this was the case with almost all the kids
#
who went to my school, who are also in the neighborhood.
#
Again, in retrospect, I am glad I learned a lot of this because when I had the ability to
#
take a decision on my own and had the choice, I am glad I knew these options.
#
You know, I could decide, and many of my friends decided to, quote unquote, renounce religion.
#
And they went, you know, in a different direction. Many of us stuck with it.
#
And it's very interesting. At 60, 65, I find many of my schoolmates who went to IIT,
#
went to, you know, some other place and decided to give up religion. At 62,
#
have come back to religion with a vengeance and are relearning a lot of what I learned
#
naturally in the Delhi that I grew up in. But to come back very sharply to your question,
#
completely grounded in terms of language, in terms of culture, in terms of values,
#
in terms of upbringing, equally felicitous in the St. Stephen's manner of English
#
debate. And one never felt overloaded. One could handle all this. One wasn't conflicted.
#
I didn't see a conflict between learning modern constitutional law, article 14,
#
and what was actually being practiced at home. Over a period of time, one began to figure out
#
and one then began to discriminate a lot more than say what my father's generation did.
#
Father's generation marrying outside the community was unknown. Not only was it unknown,
#
there was also a serious judgment. You know, it was looked down upon. Somebody who married outside
#
community was almost an outcast. But the cosmopolitanism and the modern values taught you
#
that a lot of these good things are not so skin deep. There is a fundamental goodness which is
#
independent of religion, caste, community. So I'm not sure if I'm able to communicate this,
#
you know, as clearly as I'm able to think. But I think the result of this sort of migration,
#
intermingling of culture, apparent clash of values was the evolution of something
#
which is truly a great mix of all the good things of these competing cultures.
#
I want to double click on that. And obviously, you know, I'm an atheist, so I have that bias.
#
But just to sort of double click, I wonder how one disentangles the comforting and the wise aspects
#
of our traditions from the toxic aspects of our traditions and how, you know,
#
modernity clashes with that. For example, in a recent episode, Ajay and I discussed a question
#
that a friend of mine, who I'm not allowed to name, had asked, and I love the formulation of
#
the question. And the question was really at a societal level. And the question is,
#
can we grow rich and still beat our wives? Or do we have to stop beating our wives to grow rich?
#
Right. And the question there was that, does prosperity require modernity? Or can we get,
#
can we become prosperous without necessarily adopting enlightenment values and liberal values
#
which some might call Western, etc, etc. The area of tradition that the question highlights is,
#
of course, the dark areas that we are left with, the misogyny, the sexism, which is why, you know,
#
beating our wives now. And I accept that, like, when I lament that I am not rooted enough,
#
I am lamenting, you know, something quite different, which I can't possibly articulate
#
very well. And it really has nothing to do with religion and perhaps more to do with culture,
#
though obviously they are entwined together. But then, you know, when you are, for example,
#
in college, like on the one hand, you're exposed to enlightenment values in a general sense.
#
At the same time, you are exposed to law and the legal system and whatever that holds, where you
#
have to, you know, think with certain rigor about that. And at the same time, you have
#
this backdrop of traditions which form the environment around you, especially at home,
#
you know, and there might be conflict there, there might also be a resonance between modern
#
values and older values. But at the same time, you know, I'm sure there are areas which are not so
#
easy to reconcile. And you can adopt the values that you have learned through your later experience
#
and look back on your family or your home or whatever. And, you know, things may not quite
#
make sense. You know, what was that process of your forming your frames of the world like and
#
how you come to terms with your own identity of who you are? I think it's a great question.
#
And I think very relevant, you know, sort of contemporary sense, what you called the toxic
#
aspects of our culture or of traditions. Now that I'm more familiar with the detailed aspects of our
#
tradition, I'm a fairly regular listener to not exactly podcasts. I'm sure those pontiffs would
#
be horrified if I called what they do podcasts, what are called pravachans. You know, for instance,
#
most of, this is actually true of all Indians, certainly in the South, we belong to one of the
#
four Shankaracharya mutts. Adi Shankara himself is supposed to have established four Shankaracharya,
#
the mutts that he established, essentially to propagate the Vedas. We belong to this
#
mutt called the Sringeri mutt. Sringeri is a location in Chikmagalur in Karnataka, the state
#
that I went to work in. The Sringeri mutt, the tradition goes back to one of the disciples of
#
Adi Shankara himself. And it's a mutt which has very rigorously and scrupulously struck to
#
the tradition of doing nothing other than Vedic propagation, full stop. They don't get into
#
education, they don't run hospitals, they do not get into other worldly activities.
#
And their philosophy is very clear. I expound a certain worldview and a certain philosophy.
#
Those who want clarity and understand this philosophy more, my primary duty is to enlighten
#
them, clarify their doubts. I am not here to impose this view on the unwilling. The willing
#
who wants to learn and who wants to understand this in greater depth will necessarily have
#
questions. And our tradition believes that if you want to understand this more and more,
#
you need a guru. You can't self-learn. We are here to answer questions
#
of those who choose to be disciples. That's the tradition of this mutt. So it's a very
#
modern live and let live philosophy, which, as the guru keeps pointing out, is the original
#
philosophy. So what you called toxic is actually, in my personal opinion, a complete misunderstanding
#
of what the most original of them, namely Adi Shankara, propagated. And I listen to the
#
pravachans of the Sringeri Mutt very regularly and those who belong to the Sringeri Mutt tradition.
#
It's a tradition or a school of philosophy. And I am struck by the fact that coming from this deep
#
orthodoxy, he keeps explaining repeatedly the meaning of the word Brahman. And
#
the explanation constantly is the Brahman is the one who is seeking the Brahman.
#
So it is not by birth. It is actually by karam and by learning. So to sort of, without going
#
too much into that philosophy part, I think the attention that I want to draw, you know,
#
your attention, the attention of the listeners is many of the toxic elements are the result
#
of a very superficial, very sort of narrow reading of some headline narratives.
#
If you actually, and I'm hardly a learned person in this area, I'm an interested person.
#
I listen regularly. I'm not trained, you know, deeply in philosophy. I know
#
a bit of Sanskrit. I've done Sanskrit till class 11. I'm not learned in Sanskrit enough to claim
#
that I know this philosophy very well. And even I have figured out that a lot of what is masquerading
#
as tradition is actually this complete inadequate, superficial understanding of our traditions.
#
And if you actually want to understand the tradition, if you're interested,
#
and if you go deep enough into it, you will figure out that it's actually very modern,
#
very egalitarian, very equal, very equal opportunity. It explicitly says no woman,
#
no quote unquote downtrodden, or, you know, if you want to use modern terminology, lower caste,
#
no one is denied the opportunity to learn. And explicitly, there are questions that were
#
posed in one of those famous, you know, pravachants that I'm listening to on,
#
are women allowed to learn and expound the Vedas? And Shankaracharya, the current Singheri
#
Shankaracharya explains not only are they allowed, he lists and he can't complete the list of
#
women scholars of Vedas who've been gurus to many men. So, to sum up, if one has had the patience
#
and made the effort to actually understand this, one discovers that there isn't too much of a clash.
#
In fact, there isn't a clash. But I can't claim that I had figured out all this
#
when I was learning by rote a lot of the shlokas. At that time, it was actually imposed on me. I
#
didn't even have a choice. But I'm glad it was imposed on me because that is what made me
#
understand Sanskrit. It is that understanding plus life experience and listening on my own
#
now to the gurus, which is enabling me to actually discover all of these modern,
#
hidden thoughts about our traditions, which is reconciling all of those conflicts that apparently
#
occur. So, I think one has to have the patience. One has to go in depth. And in my understanding,
#
limited as it may, I don't find a conflict at all. And I'm able to reconcile these multiple
#
worlds without any effort. So, I'll come at a broader question. I had recorded a few years
#
ago with Tony Joseph, who wrote Early Indians. And the great revelation in that for me was from
#
his narrative of how, after all the big migrations had taken place to the subcontinent,
#
for a thousand years or so, everybody was partying with everyone else. It was intermingling.
#
And then around 2000 years ago, one particular ideological strain from the Gangetic Belt won out
#
and you had severe caste endogamy, which has persisted to this day, which is why David Reich,
#
in a book, Who We Are and How We Got Here, says that if you're looking for a large population,
#
don't look at India. The Han Chinese are a large population. India is a collection of many small
#
populations. And I was sort of struck by that characterization of how what we think of as
#
Hinduism today was, with all its caste and endogamy and so on, was one narrow ideological
#
viewpoint from a particular place which happened to win over. And as many people have said,
#
and as you've just explained, that is just one strand of it, that its origins might be elsewhere.
#
There are other schools of thinking. However, what we see in modern times is that once again,
#
like 2000 years ago, that ideological strand is winning over to the point that it is in the
#
popular imagination, Hinduism is appearing to many to be like a monolithic thing, which is only that
#
strand with all its toxic elements. And the question then here is that if there is a sort
#
of a deeper and even more modern, as you put it, a more enlightened form that doesn't contain all
#
these inequities and toxicities, why is that failing to gain big ground? Is it because
#
anger sells better than, say, love or peace or understanding and etc. etc. Is it because those
#
emotions have more sway? Is it because of social circumstances? Like Carl Schmitt famously said
#
that in politics you have to have an other. And that particular ideological strand will give you
#
many others, more specifically Muslims. So what's going wrong there? Like many people often speak
#
of reclaiming Hinduism from Hindutva, right? So what are sort of your thoughts, sir? Is that
#
a project that is possible? Is it just sort of an accident of history or an inevitability
#
that things have taken the turn that they have taken? Honestly, can't claim to have
#
sort of great in-depth knowledge of this. But whatever I have seen, read, understood of this,
#
this is not the first time this is happening. In fact, if I recall right, one of the
#
major missions of Adi Shankara was to retrieve Hinduism from itself.
#
Wow! In a sense, if you read his writings, the Hinduism of his times, it may not have been,
#
you know, the phenomenon that you describe of today. But something very similar, a whole bunch
#
of practices, quote unquote, not entirely desirable, which had now come to inform the practice,
#
which clearly didn't belong to Hinduism. And this man who lived only till 31, 32,
#
I don't remember, it's early thirties that he sort of left this world, went around all of India
#
and clarified, quantificated on what is the essence of Hinduism and reclaimed, quote unquote,
#
the pure, the karmic theory, which in one sense, it's a very, very modern equal philosophy, namely,
#
what you do is what you become. And if you do good things, you will reap good results.
#
If you don't do good things, you will need to reap the consequences of what you do.
#
And if you seek knowledge, you can be a Brahman.
#
Exactly. And you require to make the effort, you don't become anything by birth. So almost all of
#
modern, quote unquote, and relatively, if I can use the phrase, secular values, is what he preached.
#
And we are talking about thousands of years ago. And a lot of his writings talk about his struggle
#
his struggle to establish this kernel of, you know, the truth, the karmic philosophy
#
in a mahol, in an environment where all kinds of contaminations, all kinds of wrong beliefs
#
were actually masquerading as Hinduism. So I'm assuming from that description
#
that this is not a new phenomenon. Hinduism has gone through such phases. And
#
what he also points out and what others have pointed out is the inherent strength of this
#
large, I wouldn't even call it religion, body of belief, which has religion, which has a whole
#
bunch of other things, philosophy, culture, the strength of this is it will self revive, you know,
#
when the wrong elements reach a certain stage, they actually become self-defeating
#
and they are self-destroying. So there is a Shankaracharya who emerged then, and quote unquote,
#
purged a lot of the then India of these undesirable practices, established a more
#
sort of sane, cleaner, desirable way of practicing religion. My historical sense is that it's an
#
ongoing process and it keeps happening. There are reasons why this happens and I don't think it's
#
only in India. One sees this across the globe, a revival of a certain philosophy and a worldview
#
and the other is, I think, a very much a part of the narrative in a lot of the world. And I think
#
it's the direct result of series of things that have happened prior to it, which makes the other
#
narrative gain currency. And once it becomes apparent that it is not the other, which is
#
the explanation for my lot, I think it will die a natural death. In the meanwhile, will it cause a
#
lot of harm? That's what I think one would be worried about. I'm personally a very optimistic
#
person in terms of my worldview. My sense is this too shall pass and this is self-correcting.
#
There was a good reason why it emerged, a good as in explanation, not necessarily good as in
#
I agree with that reason. There was a reason why it emerged and it'll expose itself when it doesn't
#
answer and solve all the problems. We'll need to go back and seek newer answers. So I think,
#
I personally think this will sort of run its course. Couple of questions. One is what you
#
alluded to that there are reasons that explain why it emerged. And like I did a recent episode
#
with Timur Quran, where we spoke about similar trends in Islam, for example. And you see this
#
across the world, across different religions, that you have these ebbs and flows. And question
#
number one is why do they tend to degrade like this? Is it a consequence of human nature being
#
what it is? That some of our worst impulses like tribalism, etc, etc, take religion into these
#
different directions. And my second question is about the self-correcting nature of what
#
you're saying. And I'll push back a little bit and say that one, if you just look at caste,
#
caste endogamy has been with us with us for 2000 years. I believe that in the long run,
#
markets and urbanization are a force against it. And it will be a slow journey away from it. But
#
nevertheless, they have sustained and they haven't self corrected. As Akshay Mukul's excellent book
#
in the Gita Press demonstrates, a lot of what is wrong with the religion are pretty deep rooted
#
in the culture from my admittedly biased standpoint as an atheist. And even in modern times,
#
you know, if we think of history as cycles, where things get worse and get better in predictable
#
ways, I'm not sure that, you know, that looks at a small sample size of a few centuries.
#
But if you actually look at what is happening in the modern times, where, you know, 30 years ago,
#
we spoke of the end of history, and we assume that progress is inevitable, the arc of history is
#
going where it is going. But today, you have more and more moves towards populism, tribalism,
#
polarization, etc, etc. And I don't believe it's part of a natural ebb and flow. I believe it is
#
very definitively caused by social media and technology, which are a huge net force for the
#
positive in my view. But the side effect is that they drive people towards the extremes,
#
you know, that is what they incentivize extreme expression and tribalism and all of that.
#
And I can't, though always the future is unknown unknowns, but I can't imagine a way out of this.
#
And I find it hard to be so optimistic that we will somehow come out of it.
#
Let me, you know, everything what you said is factually true. I can't disagree with it.
#
But let me give you an example of the positive self correcting nature of this phenomenon that
#
I referred to. If you had been in Tamil Nadu of the late 60s,
#
Hindi vazhiga, this is Tamil, which is death to Hindi, or Hindi go away, was the entire origin
#
of the, you know, besides the religion, besides the self respect movement,
#
the entire origin of the Dravidian parties, and the near elimination of Congress in Tamil Nadu
#
was related to the official language related reaction.
#
And prior to that, if you recall, somebody like Rajaji headed the, I think it was called
#
the Dakshinabhartiya Hindi Prachar Sabha as part of the Gandhian movement that more and more Indians
#
needed to learn Hindi. And even, you know, the three language formula equivalent, three language
#
formula is sort of a way of putting it. The Tamilian must know Hindi was a very strong
#
movement during pre-independence, culminating in independence. And then 10 years, 12 years of
#
Congress rule, a bunch of reasons why, you know, may have been socialism, may have been role of
#
state, not enough employment opportunities. The economics of what was happening led to
#
the discovery of the other. What was the other? Hindi. Imposition of Hindi is the reason why
#
we guys are not making progress. And people like N. Ram, the famous book Hindi Against India,
#
it was such a powerful movement in, especially in Tamil Nadu, that Congress got wiped out. And
#
if a Government of India establishment in Tamil Nadu as much as wrote Ayakar Vibhag,
#
that building would be set fire to. You know, the board, of course, would be destroyed.
#
People were attacked. So, in the late 60s, early 70s, and we would go, you know, annual summer
#
vacation, there's this famous train called the Grand Trunk Express. It took you 48 hours to reach
#
Chennai, then Madras. We would go and we would be, we had grown up in Delhi. We spoke excellent
#
Tamil. We learned Tamil in school, but we equally knew Hindi. Rashtra Bharati, Baag 3, Azadi, and
#
Khuni Darwaja, and all of that very literary Hindi. We were very comfortable and familiar with Hindi.
#
So, the Delhi Tamilians didn't have any problem. And they figured out that the way to prosperity
#
was many languages. And if you needed to be effective in the Central Secretariat in Delhi,
#
you needed Hindi. If you want to travel to Punjab, you need to know Hindi.
#
So, they learned Hindi as a practical, pragmatic, quote unquote, market measure.
#
But you try saying this in Tamil Nadu, you would be lynched.
#
This is the Tamil Nadu of the late 60s, early 70s. Ironical, if you go to the Tamil Nadu of today,
#
thanks to its prosperity post that phase, Tamil Nadu is now in terms of per capita income relatively
#
in the top two or three states in India. And it is actually becoming a bit like
#
the demographic dividend argument in the world. There is part of the world which is young,
#
which has willing labor. And there is a part of the world which has grown old, also prosperous,
#
is not willing to do menial tasks. So, the first world that I described,
#
the young willing to work, needs to export labor to this more prosperous, older world.
#
Within India, we actually have at least two Indians on this demographic economic trend.
#
An average Tamil Chennai restaurant, an average Tamil Chennai household
#
will have a Uttarakhandi, a Nepali, either these two, or a Bihari Jarkhandi,
#
or a West Bengal Odia Assam person in all probability as the security, as the Istriwala,
#
the iron man, or the Khana banane wala. More important, you know, for instance,
#
if you are familiar with Chennai, there are these old bastions of Tamil cuisine in Adyar.
#
It is a very prosperous locality in Chennai. There is this venerable old
#
dukan called Grand Suites.
#
The Bay Tamilians, the Tamilians in Wall Street who are earning in six-digit dollars
#
for their December visits to Chennai, major agenda is buying pickle, namkeen,
#
other khane peene ka samaan from the Grand Suites. This is the pinnacle of old Tamil culture.
#
Last year, we had gone there and we were ordering a dosa. This guy brought the dosa
#
and I kept asking him for sambar and I discovered that he is not responding.
#
Then I realized I am speaking in Tamil and that's the reason why he is not responding.
#
So then I turned to him and said,
#
All of Grand Suites, the workers didn't know Tamil, they only knew Hindi
#
and the owner and almost all the customers were speaking to him or her in Tamil.
#
Now, Tamil Nadu, you don't hear Hindi any more.
#
Tamil Nadu will collapse if and it did. If you remember about six, eight months ago,
#
there was some scare about Biharis in Tamil Nadu were going to be targeted or some such,
#
you know, crazy social media post and the Bihari boys and girls decided to leave.
#
Tamil Nadu Chief Minister came on the social media to assure them,
#
there's nothing wrong, we will look after you, you guys don't need to leave.
#
I think this is the power of the market. Now, it will not yet be politically correct in Tamil Nadu
#
to stand up and say, guys, Hindi is now dead, because there is still the Dravidian electoral
#
politics. So, Hindi as a bogey will continue to be raised. So, when I have a problem with the
#
central government on some issue, and I don't have a good enough reason, I will resurrect
#
Hindi and be able to mobilize people into Jindabad, Muradabad. But the Tamil Nadu economy
#
will come to a grinding halt if we were to do any Hindi oligarh today. I think, I actually see,
#
I don't think, just don't think, I see similar things happening on caste.
#
In Delhi, I don't think anyone can today ask his or her maid, his or her driver,
#
his or her security person, that boss, who are you? And even if you ask, if you go beyond that
#
and decide, I am not going to employ you because of your caste, clearly you are going to be the
#
clearly you are going to be the sufferer. Does it mean caste has ended? No. People will still look
#
for their, you know, Baraseni, Baniya sub-caste for Shadi. That's still happening. So, caste is
#
not dead. But I think caste and this very fundamental linguistic sort of differences,
#
is markets are, I think, very effectively demolishing them. And I have faith that very
#
soon these will lose their virulence and potency. Will they go away? I think a lot of politics will
#
keep them alive. And a lot of, you know, still a lot of India marries on the dictates of their
#
parents. And parents will still take time to figure out that you need to go beyond this.
#
That will happen. But I am confident. So, I am answering you not with deep philosophical sort
#
of reasoning, but I am answering you with live examples of what I have seen. And I see this all
#
around, not only in Chennai, I see this in Kerala. I see this in Andhra. I see this across India.
#
Earlier, I saw this only in Bombay and Delhi. Now, thanks to the fact that there is prosperity,
#
there is income, the national labor market will ensure that a lot of this is a thing of the past.
#
Beautifully said. And you know, just that thing about Hindi also expresses the difference between
#
coercion and consent. Like the earlier protests against Hindi was because Hindi was very much a
#
political weapon at the time. It was sought to be imposed. And today it is not there because
#
the entry of Hindi, as it were, into Tamil Nadu is happening through voluntary action,
#
through positive sum games. And I share your faith that markets can change all of this by
#
changing the incentives. But my related worry there also is that markets aren't really being
#
allowed to that extent in India, as much as we would like. I mean, we sort of had a golden
#
period of hope between 1991 and maybe 2011, 20 years of hope. But even today, you know,
#
we have a severe unemployment crisis in the country, especially in the heartland.
#
The demographic dividend sometimes appears like a demographic disaster. What are all of these young
#
people going to do in times of scarcity? You know, you are pushed towards politics, you're
#
pushed towards anger, you're pushed towards tribalism. So that also sort of worries me.
#
But I agree with you that the answer in the end is markets and voluntary action and
#
how that changes incentives. Yeah, I share that worry. I completely share that worry. And I think
#
quote unquote socialism, not the socialism as philosophy, but socialism as instrument.
#
Government servants and governments do not yield, you know, they don't accept defeat easily.
#
You're right that post-91, a determined effort to sort of redress this state market's
#
balance right ran well across governments, you know, different political parties,
#
different formations, whatever they said when they were out of power,
#
in power, they just stuck to one simple philosophy, keep moving this needle.
#
You may not be able to do huge market success on day one, but make sure you didn't regress.
#
And you just made incremental progress. And I am worried post 2011, partly the global financial
#
crisis and financial markets getting a bad name for all markets. And there were excesses in global
#
markets not to be disputed is again being used very cleverly by quote unquote, the Indian state
#
missionary to retrieve lost ground and make its inroads back into, you know, markets, coupled
#
with what the latest, you know, one of the more recent economist issues beautifully summarized as
#
homeland economics, namely, it is not homeland security, it is homeland security, now determining
#
economics. So combination of these is bringing the state back in, I think, in undesirable areas in
#
the market. That's a that's a worry. But I think we'll park it for now. Maybe we'll come back to
#
this topic a little later. That's the cause of worry. Let's come back to it later. Let's go back
#
to your childhood. I'm also interested in how your thinking and the ways that you think evolved
#
through your experiences and your education. For example, you know, I would imagine that,
#
you know, learning Tamil, to some extent, along with English, you know, shapes the way that you
#
think I would imagine that memorizing Sanskrit shlokas day after day also shapes the way that
#
you think because the language has its own structure, the act of memorizing makes a difference.
#
I would imagine that studying economics shapes the frames through which you look at the world
#
in a certain way. I would also imagine that studying law as you did possibly has a possibility of
#
bringing some, you know, rigor to your thinking, or perhaps expressing a natural inclination for
#
rigor that might already have been there. So I want to ask you if you can sort of look back
#
and talk about how you evolved in the ways that you think about the world, number one,
#
and number two, in what you think about the world in terms of the frames that you gradually
#
apply and how that changes. All these are clearly important influences. But you know, let me answer
#
it slightly different way. A lot of us think that we made very rational decisions on our own. I think
#
we hugely underestimate the influence of quote unquote, to use modern language,
#
many of the influencers in our lives. And I think I want to use this opportunity to talk about
#
the powerful influence of mothers. My mother was no more. I lost her last year at ripe old,
#
well lived age of 93. She was not very, not at all fluent in English, very fluent in Hindi,
#
because she came to Delhi as a young, you know, bride in her late teens in the 1940s. She knew
#
Tamil, she knew Malayalam because she grew up in Kerala. She learned Hindi. She would know
#
actually a smattering of Punjabi because their neighborhood was all Punjabi. Didn't know English
#
because she had only studied up to class eight. My dad was in the government, as I mentioned,
#
and early on when he was probably just a section officer, or maybe just above a section officer,
#
he and my mom attended a farewell dinner that was being given for one of his boss's bosses,
#
two steps removed, a deputy secretary. And they had gone, I think, to the house of a colleague
#
who had hosted a dinner. And my mom watched the sons of the deputy secretary,
#
or the sons of the joint secretary, I don't recall. And she made inquiries. All she remembers,
#
and she would keep telling me the story, very smart young boys, blue blazers. And on, you know,
#
the blazer carried the name of the college. And she managed to read and speak to one of the boys
#
who knew some Hindi. And it said, since Stevens College. And then she asked him what he was
#
studying. And he said a subject which she didn't know existed called economics. And she again made
#
inquiries and spoke. And to cut a long story short, she came to the conclusion that smart boys
#
come out of Penn Stevens, they read economics, and then they get into the IAS. And then they also do
#
jobs in the UN. Now, this was, I think, tremendous learning for somebody who had been to class eight
#
and completely unfamiliar with the ways of this world. In the late 60s, she had figured out
#
this is what she wanted her son to do. Go to Penn Stevens, do economics, join the IAS,
#
and get into the United Nations. This in her sort of worldview summarized the pinnacle of achievement,
#
the prestige of government standing in society. It's not greatly paying. Therefore, you do a UN
#
stint, you make a decent amount of, you know, very legitimate money. And in socialist India,
#
the state mattered more than anything else. So, this was a great sort of career in her mind.
#
So, in school, I did Sanskrit in class 11, I mean, 9, 10 and 11, along with science.
#
CBSE permitted a very interesting combination, physics, chemistry, mathematics,
#
and English. These were compulsory. The fifth subject was in the science stream, biology or
#
Sanskrit or geography or mechanical drawing. Our school didn't have mechanical drawing because you
#
needed, you know, some additional facilities and our school didn't have. So, we had choice between
#
biology, Sanskrit and geography. Sanskrit was pre-decided, that my dad had decided.
#
I had actually gone and sat and filled up my form to go into the commerce stream.
#
And, you know, if you remember early on, I'd said, despite being in Delhi, it was like being
#
in a village, Agarharam, which is a small, actually a small village. On day three of my class 9,
#
the principal who was taking a walk, you know, inspection type walks, peeped into the class,
#
saw me through the window, walked into the class and just asked me to stand up. I stood up. He
#
said, what are you doing here? I said, I have opted for commerce. He said, how did you opt for
#
commerce? I said, I want to do commerce. I don't want to do science. He came, actually did this.
#
He caught me by my ear, took me to his room, made me sit there. He said, let me see your form. So,
#
he dug out the form, said commerce. My dad had signed it. So, he called my dad in his office
#
and he said, Mr. Haran, how did your son go to commerce? He said, he wanted. He said, I'm
#
undoing it. My dad said, fine. He undid it. He scratched commerce off, put me in science.
#
And he said, your dad would want you to do Sanskrit. He decided, put me in Sanskrit,
#
signed for my dad and said, now please go and sit in section A of class 9. You are in science.
#
And that was the end of it. There is no privacy. There is no article 19, 1A. This was a different,
#
in a sense, a very gentle world, but this was a village community.
#
Was it a good thing or a bad thing that that happened?
#
In retrospect, I actually think it was a great thing. I must have been, I recall I was terribly
#
unhappy. A, I felt very slighted. I wanted to do commerce. I think I want to do economics. I didn't
#
know what they meant. I was sure I didn't want to do science because I would get good marks.
#
It was not because I liked it. Somehow I didn't like science. So, in today's world,
#
this would be sacrilege. There is no question. But that principal imposed and my dad said,
#
it's fine. Principal knows what's good for us. He has put you in science. I am glad I did science
#
now. Because without that base of physics, chemistry, mathematics, I think I wouldn't have
#
done anything that I did later. And I am glad I did that science. At that point in time,
#
I was terribly unhappy. I went through school. I finished school, did well because we were good
#
muggers. All it required was you need to mug your physics. You need to mug your chemistry.
#
I was naturally good at mathematics. And I think that's something to do with the same Agraharam
#
Tamil village where it is drilled into you that if you don't do maths well, you're not a serious
#
Tamilian. And you therefore knew your tables by heart. You knew maths naturally. Everybody around
#
you did maths. So maths came naturally. Sanskrit came naturally because you're also doing Sanskrit
#
at home, shlokas and all that. Swiss chemistry, English, one mugged. And if you were capable of
#
mugging, and I think Tamilians are, and Sanskrit makes you a great mugger, so you did well in
#
school. One ended up without, you know, anyone explicitly telling you. The only application I
#
made was to send Stevens economics. And those days they had a very nice thing. If you appear in what
#
is called the CBSE merit list, which is rank one to 20 in the entire CBSE, you got automatic
#
admission, meaning you didn't have to go through an interview. So in my case, I was in that famous
#
merit list and I got automatic admission. And I, you know, one looks back, these are the accidents
#
of life. If they had had an interview, I wouldn't have made it. Why? My sort of ability to articulate
#
myself in English was very low. You didn't speak in English in the schools that we went to. You
#
spoke in Tamil, you spoke in Hindi, you spoke in Punjabi. So my Hindi, Punjabi, Galis, you know,
#
local lingua was all very strong. Written English was excellent. You could think in English, but you
#
were very under confident speaking in English. And since you didn't speak in English, you were afraid
#
of speaking in English. So since Stevens interview was a very formidable, you know, it can appearance
#
itself. And I think these colonial quote unquote institutions were designed to all. So when you
#
showed up in St. Stevens, the grandeur and every other kid is, you know, the son of Jesus of India,
#
son of attorney general, son of some secretaried government who are in their houses, they speak
#
in English and they are conversing with each other in English. As it is, you're an under confident kid
#
and you see this mahal and you sink. You're very worried. So in a sense, I was thankful
#
that I had gotten. And the good part is since you were an inherently strong kid in terms of your,
#
you know, upbringing and confident about your maths. Day one, when the economics lessons started,
#
KRC, our famous microeconomics teacher was a phenomenally mathematical microeconomics teacher.
#
So he started first lesson in demand and supply with graphs and dy by dx. I was thrilled. So I
#
said, this is something I can handle. So dy by dx and, you know, second derivative and integration
#
is stuff that one can handle. But if he asks me to stand up and speaker, you know, speak to the
#
class on inflation in India, I'm dead. But all it took was one semester and you figured out
#
a bunch of very nice kids around you, you know, superficially, they look like they are dadas and
#
they throw their weight around. None of them is. And day one, when we were coming back,
#
Dhananjay came and said, I haven't done maths in school. He had done humanities.
#
So he said, my maths is very weak. Abhishek Singh, we also had not done maths. So we made a deal.
#
Boss, every afternoon when we go back home, you will sit and teach us the maths that was done in
#
class. We in turn can share our notes on other stuff. And which is what got me entry into that
#
quote unquote elite club. But for that, maybe I wouldn't have broken into, you know,
#
Nanavati versus state of Maharashtra later. But I think the entry point was some strength that
#
you had, which somebody else didn't have. But to come back to your question, this choice of economics
#
since Stevens, IAS, and as it turned out, I landed in my 1993 would be, you know, less than
#
11, 12 years of service as executive assistant to the director representing India and the World
#
Bank, Dr. Bimal Jalan. It's almost like the script that she had written for me. You do economics
#
and then figured out that those days post the Kothari Commission civil service exams required
#
you to do two optional subjects. And then since one was inquisitive and dad had bosses who were
#
from the IAS, one got access to them. One went around asking. Everybody said economics and law
#
are two things you require if you want to be an effective government servant. It made sense to
#
do law because law gave you the second subject. Law was considered reasonably scoring if you knew
#
your law. And it helped that my entire class was sons of lawyers who are all naturally migrating
#
to the campus law center. So one floated with them into the campus law center. And looking back,
#
it's like a dream. You finished law in 1982. In 1982, you wrote the exam. You got in in 1983
#
and you joined the IAS. This was ordained. So in one sense, I didn't make any of these decisions.
#
These got made. And I'm glad these got made because ideally, if you gave me the option today,
#
rationally, I would do exactly this. I would have done science in school because it's a great base.
#
I, given my inclinations, despite having gotten into IIT as an NSTS scholar, I'm glad I didn't
#
go near the IITs because I don't fit in terms of my temperament. You give me a screwdriver and a
#
screw and I can screw up. I can't do the minorest of carpentry. I can't handle other than switching
#
on and switching off. If you ask me to set right anything, it doesn't come naturally to me. And
#
there are friends of mine who do this automatically. So I think I'm a humanities,
#
economics, maybe maths type person. I'm not a science type person. So I would rationally
#
have done all of this, but I didn't do any of these on my own. I'm so struck by how the
#
happenstance can lead you along part dependence. Like your mom could easily have gone to the home
#
of someone whose son went to IIT instead. And she could have gotten that into her head.
#
The principal may not have chosen to look into the window at that very moment and
#
seen you in the commerce class. So it's just, you know, and it should also, you know, fill us with
#
so much humility that we think we are in control of our lives and our destinies, but so much is
#
accurate. Exactly. You know, one strutted around in 8283, like one had actually cracked these,
#
but it didn't take very long to figure out you didn't crack any of this. Someone else,
#
or if you're a believer, someone else, if you are not, accidents are cracking all these.
#
And, you know, I'm one of the recent interviews and Ajay Banga repeats it in more than one
#
interview. And he's a fine person and not withstanding all this wonderful achievement,
#
a very simple, a person of great humility. And he keeps pointing out in every interview,
#
when somebody asks him, you know, and you're a great achiever, he'll stop him. He'll say,
#
remember, 50% of life is luck. Yes, I'm not saying I didn't make the effort, 50% is effort,
#
but please don't forget that at least 50% is pure luck. You called it happenstance,
#
somebody else will call it divine. But how much of our lives is actually not of our making is
#
something you're struck by when you look back. I would have said 50% 10 years ago. Now I'll
#
actually say 90% or more like happenstance made me like a professional poker player for about
#
five years. And the biggest lesson I learned in those years and poker, of course, is a game of
#
skill. But the quantum of luck is higher than in other games of skill. So you need really large
#
sample sizes for this for your edge to express itself. And one thing I realized in those years
#
is that not only do we underestimate the role of luck in a game of skill, but we also underestimate
#
the role of luck in life itself. So people will achieve great things and they will let it get to
#
their heads and become arrogant, or people will suffer setbacks and they will, you know, they will
#
become diffident and they will stop trying and it becomes a vicious circle. And the truth is 99% of
#
everything is luck you control so little. And the older I get, the more I realized that, you know,
#
so much is outside our control and we should have adequate humility. Before we go in for a break,
#
you know, a final question really, you know, following on from what I last asked, I'm also
#
curious about the frames through which you look at and interpret the world. Because when we are
#
young, the world is complicated. When we are young, we want to figure it out. And we want to, you know,
#
any the first frame we come across that appears to explain things adequately, well, we take it up.
#
Now, you know, you grew up in pretty much hardcore socialist India, you know, no access to the
#
internet, no access to knowledge. You studied economics, but I really doubt you would have
#
studied Hayek or Friedman unless you, you know, sort them out yourself. So how did your frames of
#
looking at the world evolve? Like, I'm sure a lot of it would have come during your field work,
#
during IES and all of that. And we'll talk about that after the break. But in general, in those
#
years through your teenage, really early 20s, early on the IES, how are you thinking of the
#
world and how is it evolving? Since Stevens, 76 to 79 was a great place to be in, in terms of
#
the exposure and the readings, not only the readings that you did, the readings that your
#
friends were doing. More important, you know, the background that I came from, the readings one did
#
were your spare time, you learned Sanskrit shlokas and you learned essentially what you needed
#
to max your school scores, science. So it was all seriously applied stuff. If it was non-applied
#
stuff, it was typically religious philosophy, but sort of college environment. And if I'd stuck to
#
what the average person from my school did, the average person from my school, the brighter ones
#
went to IIT, a whole bunch of us. And it's interesting looking back, nobody went to IIT coaching.
#
A, because we were all lower middle class kids, may have been statistically top 1% of India's
#
population, but sons of undersecretaries, section officers, there's no loose cash.
#
Sangals, which was the only IIT coaching in the world, in South Extension used to be some 50 bucks.
#
And 99% of the school that I went to couldn't afford Sangals. More important,
#
tuition is for the quote unquote, stupid kids. Good kids don't need tuition. So you studied on
#
your own. So my contemporaries who got into IIT, a whole bunch of them from DTEA, the school that
#
I went to, none of them went for any coaching. The lucky ones managed to get previous 10 years
#
unsolved question papers. And that used to cost three bucks. You had to go buy nice hadakse,
#
old question papers would be stitched up and these guys practiced, they got them.
#
The ones who were not the IIT types, a few of them got into regional engineering college
#
and the rest did BCom. Why? Because you came from households where you finished studying
#
and you got into a job. You didn't have the luxury of lingering, we'll do a PhD,
#
I will find out, you know, I'll discover myself. There's no scope for any of that because very
#
often your dad would retire approximately the time that you graduated of plus one or two years
#
and you had, you know, sisters to marry off, et cetera, et cetera. So bulk of these guys,
#
the brighter amongst the BCom wrote the probationary officer's exams and got into GIC or
#
the brightest got into State Bank of India. The others got into some other public sector banks,
#
many of them as clerks because you could write the clerk exam earlier, 17 or 18, it had a lower age
#
and they would join, finish their BCom in the evening, et cetera, et cetera. So not many
#
actually went into either pure science or into certainly economics was unheard of
#
and it also used to be a problem when we would go home on vacations, dad would be hard put
#
explaining, why is your fellow not doing engineering?
#
He didn't even get into BCom, is it? And they would try to explain that no boss,
#
economics and sensitivity is big, but it would be taken with a pinch of salt,
#
you know, the relatives would assume that he is hiding something, that probably this guy is not
#
what he claims he is, he didn't make it to engineering, he didn't make it to BCom, he's
#
doing eco, but the plus side was, I told you the audience, sorry, peer group that I was thrown into,
#
here you are, Professor PK Tripathi in the evening, member law commission, LLM Columbia, PhD from
#
Australia, a man of letters, if there was an intellectual, serious man of, whenever you went
#
to Parag's house, Parag's dad was reading some serious philosophy of jurisprudence,
#
constitutionalism and he was a very nice, affable professor, so you would end up sitting and talking
#
to him, or you talk to Dr. L.M. Singhvi, who is fighting the cutting edge companies act matter,
#
so you got exposed to a lot more than what one would ordinarily in a BCom or an IIT tradition
#
got exposed to, which first ever time drew your attention to market, we didn't yet frame it in
#
state versus market terms, because that India had only state, it had no market, and that India
#
also didn't into you the virtues of the state, and the negative, only the negatives of market,
#
but you had teachers who taught you, who exposed you, I got exposed to Milton Friedman
#
in St. Stephen's, not great exposure to Hayek, but knew the name, started reading, and in our
#
third year, we had this subject called economic policy, and there was a standard text in Delhi
#
University those days, it's called Leading Issues in Economic Development, Gerold M. Meyer, M-E-I-R,
#
he was a Stanford Prof, it was an edited volume, which had as a rule, you know, two, three page
#
excerpts from the best economic thinkers of the world, I think that was the first serious exposure
#
to this alternative view of development, and development wasn't entirely what was driven by
#
the government, by the state, but there was an alternative, and India in a public conversation
#
had not yet woken up to it, but the beginnings of the debate were already on. The other great
#
thing about St. Stephen's was, at least during a bulk of the year, you didn't study for the exam,
#
you studied, you learned, so, you know, Delhi University used to have a system of
#
compulsory readings, and suggested readings, and a lot of our lecturers, you know, Professor
#
Kalyanrao Chaudhary, whom I mentioned earlier, the micro economics man, he was an elderly,
#
more senior Prof, a bulk of our lecturers were people who finished Delhi School,
#
are planning to write the civil services, one year later, two years later, in the interim,
#
are teaching, or are planning to do a PhD abroad, and are, you know, this is socialist India,
#
you couldn't get scholarships, and you got some seven and a half dollars per day,
#
if you had the rupee, and most of us didn't have the rupee also. So, these guys are figuring out,
#
how do you get a scholarship, you've cracked GRE, you've got 100 on 100, you've done all that,
#
but you didn't have funding. So, a lot of your lecturers were the brightest youngsters of India,
#
toppers of Delhi School, if I name them, Arun Singh, who retired as India's ambassador to the US,
#
he had what is called, you know, in MA final in Delhi School, there were two compulsory papers,
#
there were six optional papers, and there used to be this legend called Arun Singh,
#
who did six tricks, six tricks was six choice papers that you took, he took all six econometrics,
#
and cracked them, meaning 100 on 100 in the six econometrics papers. So, this is pure brain,
#
I mean, the entire body is brain. Those were the kind of people who were teaching us,
#
Badar Durez Ahmad, Chief Justice of Jammu and Kashmir, son of Mr. Fakruddin Ali Ahmad,
#
Ajay Chibber, who headed the UNDP subsequently, PhD from Stanford, who was Director of the
#
Evaluation Office of the World Bank, he taught me macroeconomics, Dinkar Khullar, again,
#
pure brain, joined the Indian Foreign Service, retired as Secretary to Government,
#
I'm just naming a few of them, Rajeevan Krishnaswami, I can go on, these were our lecturers,
#
you know, four, five years elder to you, and steeped in modern traditions of learning,
#
and they strongly encouraged you to go beyond your textbooks. So, read the, you know, the latest
#
EPW has an article by XYZ on this way of looking at India's deindustrialization. Now, in no other
#
college in DU was anybody reading even the suggested readings. Even in St. Stephen's,
#
maybe about 10% or 20% used to get excited about these readings. We were fortunately part of that
#
lot. So, the tutorials would be done and the tutorials in St. Stephen's were patterned on
#
tutorials in Oxford and Cambridge. So, they were great. They were not at all for the exams.
#
Bhadar Durez Ahmed would actually like an Oxford tutor, if I gave him a tutorial of a four page on
#
services component of India's GDP, it would come back marked exactly like an Oxford essay.
#
So, they, you know, the inculcation of reading multiple viewpoints, there is no one right answer
#
and around December, January. Hello, pull up your socks. Now, it's time for exams.
#
You've done your learning. Solve problems because you need to conquer this world. You need to get
#
your second division, first division, whatever, get into IM, Ahmedabad, make a career or, you know,
#
whatever you want. But I think very nice balance of serious learning. And I think the amount of
#
economics I learned while in my BA economics would rival the best economics that was taught
#
anywhere in the world. And absolutely current contemporary readings in Indian journals,
#
in Bharaka journal. And if you didn't have access to the journal here, Rajeevan Krishnaswamy or
#
Arun Singh would take you, you know, with himself to the Delhi School of Economics,
#
Ratan Tata Library, Apne Paisese, three rupee, photocopy, give you the article. So,
#
this is the tradition of Delhi University. And it's not a tradition that is peculiar,
#
you know, to our class, the tradition. So, I think my sort of framing of the world is shaped by all
#
of this. Clearly, socialist India, Tamil medium, Sanskrit learn by rote and Bharaka mahol. And this
#
terrific exposure in the next three years to a world I didn't know existed and got so deeply
#
interested in economics. I think our peer group at that time, we would have read more economics
#
than most guys who did MA in India. Amazing. I recorded yesterday with Santosh Desai.
#
And in one of his columns, he used these beautiful phrases in a different context,
#
earth life and sky life. And it was in the context of, you know, social media. And he was talking
#
about how most of us today have an earth life, which is our corporeal material life located where
#
we are, and the sky life, which is located on the internet in the cloud in the world and so on.
#
And I'm thinking that here you are in the late 1970s, and you also have an earth life and a
#
sky life. And the earth life is you have to prepare for the exams and do what it takes.
#
But the sky life is this beautiful, free floating world of ideas where you can go in
#
any direction whatsoever. And another question before we go in for the break is, you know,
#
expanding not just your education, but perhaps your entire career is that I find it a very sad
#
thing that when it comes to the life of the mind, many people seem to have only the earth life,
#
that they stick to the track that they are on. So whether it is in academics or whether it is
#
in their careers, that you could join a particular profession. And you could, you know, you know,
#
you know, what has to be done to get ahead. And you do only that, but your engagement ends there.
#
You're not going deeper. You're not getting into fundamental questions. You're not getting into
#
rethinking anything. And most people I would say have only that earth life, which I think is a
#
great tragedy, because you also sort of need that extra dimension of the sky life as it were. So
#
what is your sense of this? Because I am lucky that because of the selection effect, I encounter
#
and speak to people who have both lives, people like yourself and so many of my guests. But in
#
general, a lament that I hear from many of them, ki yaar main office jata ho, if I go for a lunch
#
with my colleagues, I don't know what to talk about, because they don't read, they don't listen
#
to music, they don't engage in culture, they don't engage in intellectual life. What is your
#
sense of this? I think it's a serious problem. I see this all around. And clearly, I suspect
#
one was lucky. But I suspect there was also there must have been some gene, some seed inside,
#
which made you go and seek this. And I think it's partly also the household that you grew up in,
#
both dad and mom, individually, you know, notwithstanding the circumstances that they
#
came from. In Presidency College, Chennai, the tradition was very similar. He used to be
#
my father, I'm talking about late thirties, early thirties, mostly, he was editor of the college
#
magazine. And he was a writer himself. He actually wanted to be a writer and a lecturer.
#
And this was, you know, undivided India. And he got appointed as an English lecturer
#
in candy, which is now Sri Lanka. And I believe my grand grandmother through a fit saying ki
#
you'll have to cross the seas. You can't the maximum I will permit you is within India.
#
Ideally, I'd like you to come back to the village. But you've decided you won't do that.
#
And that's how he ended up in the Imperial Secretariat. But there was always this lurking
#
lecturer, man of letters inside him. And it's a nice way of putting it the earth life his earth
#
life was Nirman Bhavan, or North Block, where he would do mundane things. I don't think he was
#
terribly interested in work study of the government of India press in Narela. Well, he did that for a
#
living. And 536, you know, he finished his work, he came home, he's a religious man, one and a half
#
two hours of his puja 839 dinner over nine onwards till one o'clock he would read. He was
#
deeply interested in astrology. So there used to be a magazine called the astrological magazine,
#
which would come from Bangalore. So he would read that from cover to cover. There were lots
#
of Tamil magazines which would come and there was literary magazines, you know, these were not just
#
halki phulki kahani, halki phulki kahani also, but editorials on what is happening in Gaza
#
in those days, and serious intellectual debates. And always the Nirman Bhavan
#
Works and Housing Ministry Library was a delight. And it's a library I'll talk about later.
#
Or maybe I'll mention it before we close for a break. He would borrow books from the library,
#
he would bring books home. Constantly the mahol, you know, other than when you had to run around
#
for earth life, because you had to buy ration. Socialist India, you had to go stand in a queue
#
to get your wheat. And then you went and dried that wheat and got it pieced in the chakki.
#
You had to go stand in the queue to buy milk. So you had to do all this, there was no escape.
#
But it didn't bog you down. You did all this. And once you did all this,
#
middle class, lower middle class India had a serious intellectual life. And there was
#
Delhi Tamizh Sangam, where Joe Ramaswamy from Chennai would come and stage that satirical play,
#
which, you know, tore apart the whole idea of reservations, the provocative sort of
#
en font terrible of Tamil Nadu. And you went to, you know, a movie, great effort. So it was a rich
#
life. Despite your monetary poverty. A lot of these you went by bus, you didn't take a taxi,
#
you waited for a bus. So a movie would mean six hours, one hour to go one hour waiting in the queue,
#
buy the ticket, three hours movie, and then one and a half hours coming back, but the time was
#
invested. So it was a I think a much more holistic life. And I think that times were also such that
#
they permitted it. So I think one carried a lot of that into one's own life. And then sort of,
#
you know, this earth life and sky life happened. But very briefly on the library, you know, since
#
I mentioned the Nirman Bhawan library, I'm jumping time, I'm sort of now in 1982, 81 82. I
#
already decided I'm going to write the civil service. Civil service required a lot of books.
#
And these were expensive books. And no coaching, no question, because it's only quote unquote,
#
inadequate kids who went to coaching. So father said, UPSC ke piche Kitab Mahal.
#
So took me on his Vespa, I went pillion. In Kitab Mahal, you would get what is called
#
diglot editions of past question papers, that is question papers in Hindi and English.
#
Those were cheaper, because Hindi editions got controlled newsprint paper.
#
Okay, so this is socialist India, paper is expensive. Diglot editions got cheap paper,
#
but they were those yellow colored paper, very difficult to read, but two rupees for one subject.
#
You had 10 years unsolved printed question papers. So we bought economics,
#
paper one and two, law paper one and two, general studies, and one I think there used
#
to be essay or something. So eight or 10 sets of question papers, a princely sum of some 18 rupees,
#
90 paisa or 21 rupees. That was the entire investment for the civil service exam.
#
I said, Kitab chahiye. So he said, chalo. So I went with him to the office.
#
Madam, long live madam, Miss Dasgupta. She was a miss, she hadn't married.
#
She was the librarian, very strong person, very fond of my dad, because he was one of the few
#
regular users of the library. And Bengalis and Tamilians have this natural affinity,
#
similar sort of intellectual traditions and things. So he took me along, introduced me.
#
She knew me, knew her. She said, haan batao. So I said, padhai karne hai. So she said, number one,
#
aapke har mein, your dad keeps getting relatives who are going to Haridwar, who are coming back
#
from Vaishnav Devi, some guys who have come for All India Institute treatment. So half of your
#
village is traveling through your house. You won't be able to study. Come here every morning,
#
sit here. I said, but I can't get into Nirman Bhavan. So she picked up the phone, spoke to the
#
receptionist who would come regularly to borrow newspapers and told him, ye ladka aayega roj,
#
you shall bring him and deposit him in the library. Done. So security resolved. I said, kitab.
#
She said, kaunse kitab chahiye. I made out a list. Miss Dasgupta could walk into the secretary's
#
room because the secretary was another regular user of the library. So she must have been 20
#
positions below the secretary. She walked into his room. Mr. I think Sukhtankar, big daddy.
#
No, no, NK Mukherjee, last ICS officer of India. And I'm speaking now from memory. It was the
#
secretary. She placed the list in front of him and she told him, an undersecretary's son is preparing
#
for the civil service exam. None of these books are related to urban development, ministry of
#
works and housing. These are textbooks. So audit will ask me later, why did library buy economics,
#
law textbooks? So I need secretary's signature. The secretary signed. She came back. Next morning,
#
some books worth 280, 290 bucks, big sum, maybe a thousand bucks were here. I studied
#
for my civil service exam entirely in the Nirman Bhavan library. Thanks to Miss Dasgupta,
#
who gave me the library space, who got the textbooks and said, sit here and read.
#
Did you stay in touch with Miss Dasgupta? I stayed in touch after my joining the service
#
because, you know, in India, they say a man doesn't, a girl doesn't marry a man.
#
She marries a family. Like that, in the India that I'm talking about, I didn't get into the
#
civil service. My dad's ministry got into the civil service. Our community got into the civil
#
service. If you had seen the joy of entire ministry of works and housing, it's almost
#
their vengeance on the system. You know, these are the guys who torment us. These are his fellows.
#
And here is our lowly undersecretary whose son, thanks to all our help, has cracked the civil
#
service. So it's almost like the ministry was happy that they had their sort of vengeance on
#
the system. And Miss Dasgupta was, of course, on cloud nine because she, in a sense, is, after my
#
mother, the most serious contributor to the civil service exam. She's no more. I was in touch with
#
her for a while and she was in a, you know, government of India, a retiree officer's colony
#
near Patparganj. But God bless her. Wow. And then your mom must have been the happiest of all. She
#
started that. Yeah. Let's take a quick commercial break and we'll come back and talk about the IES
#
here. Thanks. Have you always wanted to be a writer but never quite gotten down to it? Well,
#
I'd love to help you. Since April 2020, I've enjoyed teaching 27 cohorts of my online course,
#
Art of Clear Writing, and an online community has now sprung up of all my past students.
#
We have workshops, a newsletter to showcase the work of students, and vibrant community interaction.
#
In the course itself, through four webinars spread over four weekends, I share all I know about the
#
craft and practice of clear writing. There are many exercises, much interaction, and a lovely
#
and lively community at the end of it. The course costs rupees 10,000 plus GST or about $150. If
#
you're interested, head on over to register at indiaankar.com slash clear writing. That's
#
indiaankar.com slash clear writing. Being a good writer doesn't require God-given talent,
#
just a willingness to work hard and a clear idea of what you need to do to refine your skills. I
#
can help you. Welcome back to The Scene on the Unseen. I'm chatting with KP Krishnan about his
#
fascinating life and learnings and we've just reached the stage where the IAS is happening
#
for you. So tell me about that, because one thing I often wonder, like I remember my father
#
was in the IAS, 64, 63, 64, 65, something like that, and he would often complain in his later
#
years that he had gone in with so much idealism and that generation building a new India,
#
and he would look around at what was happening in the civil services around the time he retired,
#
which was the late 90s, and he would talk about how that idealism is completely missing and etc.
#
Give me a sense of what joining the civil services meant for you, because at one instrumental level
#
it's a natural career progression. It matches your interest. You would imagine that that is
#
where you can go, but were there other motivations? Was there a sense of purpose, not just for you,
#
but your batch mates and the people you saw around you? Yeah, so 1982 exam, 83 batch is where we are
#
slotted, and you're familiar with, you know, there is a horizontal and a vertical slotting
#
of the IAS that happens. Carder is the sort of, you know, horizontal. There are various batches,
#
different years of the same carder, so that's one serious peer group, and then there is this vertical,
#
which is 1983, across all states. So I belong to the 83 batch, Carder is Karnataka.
#
Those days still, you know, it's a large batch. It is 152 people who came through the civil
#
service exam, and close to 32 or 33 still from St. Stephen's. Not one batch, but by then, you know,
#
people had started experimenting with, earlier it used to be only a couple of years of teaching,
#
but now it is a little more. People were more years of experience, etc.
#
But I think the striking thing about the batch that I recall is, almost all of them
#
chose civil service as their first choice, and not for want of choice. So these are people who
#
could have gone into private sector, or they could have gone into banking, they chose the
#
civil service. And to illustrate, you know, some stellar names in the batch, Rajiv Kapoor.
#
Rajiv Kapoor, IIT Kanpur, Bijli, which is IIT Kanpur Electrical, Tauper, and something called
#
Ten Pointer, which is the maximum that you can get. And IIT Kanpur Electrical is the Kremdala
#
in IIT. From there, I am number one, rank number one. So again, this is something similar to what
#
I described earlier, the pure brain, the entire body is I think, brain. These are the kind of
#
people who are in our batch. And these are not guys, these are guys who gave up. Rajiv Kapoor
#
gave up Bank of America. And Bank of America at that time, probably among the best jobs that you
#
could hold. So it was still the first choice of a bulk of the people who joined to almost
#
sort of across the batch. I think very serious sense of purpose, idealism, and joining, because
#
this is public service, joining knowing full well that this is going to pay you much less than
#
alternative sort of career options. And driven by some sense of giving back society. This is not
#
to say that these guys didn't enjoy the perks of the IIS, the power. But I think there was a sense
#
that you needed all this to do social good. Because if you remember the construct of the
#
Indian state post 1950s, and I've described this in some detail in the CPR podcast on the Civil
#
Service. The Civil Service was an instrument of social change, designed to be an instrument of
#
social change. As an example, one of the major responsibilities in your early years in the Civil
#
Service is land reforms. Land reforms was explicitly taking on the existing rural power
#
structure of India. That power structure is also the, you know, is reflected in the political power
#
structure. So it is almost designed to be antithetical to the state machinery. And that's why
#
this invention of an interesting mechanism called All India Service. You are recruited by
#
the Union of India by a public service commission, which is part of the Union of India.
#
And it's only with the permission of that public service commission, which is an independent
#
constitutional body, that penalties can be imposed on you. So you are given a protection
#
in law. And why is this? Because you're going to be Subdivisional Officer Khuti in say Bihar,
#
where you are implementing land reforms, where you're going to be taking on the existing power
#
structure. These are all, you know, areas that are known to be feudal. You are going to be restoring
#
land to the tiller, which means you're taking on the landlord, who is also the very likely,
#
you know, the CM, the revenue minister. So in a sense, the rationalization of power in the IAS
#
came from this argument that you were conferred with power. And all the symbols, you know,
#
the Lal Bhatti wasn't just an ego trip. When you had to take on the established power structure,
#
you had to display some form of state authority. Otherwise, how do you take away land from the
#
current landlord and hand over to the tiller? So in that sense, I'm saying this was, I think, somewhat
#
coherent thinking and a coherent worldview in our minds. And I would think a bulk of us did that
#
in our initial five, ten years. But by the early sort of 90s, you know, when we came into
#
seventh, eighth, tenth year of service, India's view of what it needed to do
#
for development was already beginning to change. It wasn't going to be any more tilting at these
#
land reform type windmills. It was going to be much more market oriented. But at the district
#
level, at the levels at which we worked, things weren't yet, you know, so market types. It is
#
conventional law and order development, food and civil supplies, ration, women and child development,
#
those kinds of responsibilities. And I think all of us did what we could. And I think we made a
#
difference. Does one subdivisional officer in a state which has 150 subdivisions or 120 subdivisions
#
make a difference? At one level, in a numerical sense, no. But I think each of us is relevant in
#
a micro sense. So in our micro sense, I think all of us contributed. And over a sort of career of
#
37 years, if I were to summarize, was the purpose largely fulfilled? I would think the answer is yes.
#
So, you know, what you said about what some of your batch mates gave up is resonant because
#
my dad, when he joined the IAS, he had offers from the First National City Bank, as it was then called
#
and Clarion advertising, a scholarship to go to Cambridge and a job offer at EPW, which, you know,
#
was the closest option to his heart, I think, at the time. But he opted to join the IAS. And I
#
used to keep asking him in his later years that, do you think of the paths not taken? And I feel
#
that there was a regret there that he didn't express. But leaving that aside, my next question
#
is about this, that when a young IAS officer enters the service, despite the training in
#
Missouri and all of that, what inevitably happens is that you are given power which is perhaps not
#
commensurate with your experience or even your training, that you are given power over people
#
and situations in a place where you may not have any local knowledge. You are just an outsider
#
coming in, you know, with a shallow understanding of whatever is happening necessarily. So,
#
and you have to work within that constraint. And, you know, and that is in the micro sense of any
#
immediate posting that you take up. But over a career, what also happens is your IAS officers
#
will a lot of the time be shunted from department to department and therefore will remain
#
generalists. And it almost feels as if the job description and the way that, in terms of what
#
it involves, calls for a renaissance man who understands every subject and, you know, for whom
#
everything is everything as it were. But, you know, the demand cannot possibly match that supply.
#
So, how does one deal with that? Because as a young IAS officer, I guess there is a danger
#
that the power that you have, you know, can feel extremely heady, especially in the normalized sort
#
of feudalism of what I remember from the 70s and the 80s, you know. And, you know, so what was
#
what was your sort of experience with that? You know, did you have to go through a period where
#
you had to learn lessons in humility, where you had to learn, where you had to rethink the frames
#
that you came in with? Take me through, you know, some of that. It's certainly true,
#
the first statement about the amount of powers that are vested in a young IAS officer when she
#
or he goes to the subdivision. If you go to the debates, you know, the famous debates on
#
the civil service structure in the constituent assembly, and if you go to the initial design
#
of the IAS, in a very peculiar sense, it is designed to be disruptive. I think the whole idea was
#
a fair, unbiased, somewhat impetuous, but impatient young person is deliberately being unleashed
#
on rural India because of what I described earlier as taking on existing power structures,
#
taking on existing social relations, because to give an example, there used to be an act,
#
it's now renamed, which basically prohibited untouchability. And untouchability in the most
#
virulent forms when it was practiced was not only about temple entry, it was about in a private
#
establishment serving tea, there would be a different cup. Now, right wrong, this was
#
socially sanctioned. This was everybody's practicing it. And I think for fear of retribution,
#
even the people against whom this is practiced had come to quietly accept it and would suffer it.
#
There was a proactive role that
#
subdivisional officers had to play to implement this act. Now, this required a brash,
#
not a very rational person, because if he or she went into this setup and calculated
#
the pros and cons and did a cost benefit analysis, discretion lay in looking the other way.
#
But the expectation was you are foolhardy enough to jump into this and disrupt existing power
#
relations. There will be a consequence. Some guy will push back, but you are hot headed.
#
You will use the police, you will beat up people. But I think I like your expression of the
#
Renaissance man or Renaissance person to be more correct, given today, and I think rightly.
#
So the Renaissance person was expected to be fundamentally a good person. He or she thinks
#
he or she is doing good. And you will take minor liberties in terms of this guy is acting tough,
#
beat him up. This will be a lesson to the entire village, particularly beat him up if he is the
#
village headman, because if he is the guy practicing untouchability in the village,
#
breaking his leg is the surest way to tell the rest of the village that if you guys do this,
#
I'm going to take on you. So I think a lot of this was in my personal opinion,
#
looking back and looking at the literature by design. And the sort of unspoken understanding
#
in all this is there is a wiser, more balanced district magistrate sitting 30 kilometers away,
#
and there is an even wiser, perhaps more cynical man slash person of the world
#
sitting as commissioner 250 kilometers away. There are correctives that can be done. So if this guy
#
isn't entirely balanced, and he doesn't only end up breaking one leg, but he breaks
#
50 legs and causes and it is heady. And it need not be that this person is breaking legs only for
#
handling untouchability. He has decided and we have recorded instances of this goes to watch a
#
movie. And by the time he reaches the movie has started and he insists, the theater fellow says,
#
there are 100 people watching. No, you shall start from the beginning. And guys have done this.
#
There are officers who've beaten up truck drivers because the truck driver had the
#
temerity to overtake this guy's car. So I'm not disputing the, you know, the point that you're
#
making that it can be heady. And there have been abuses, but the very fact that these are few and
#
far between say something about the selection. So if you fundamentally went through a good
#
selection process and gave discretion to young persons with a broad agenda,
#
and with a corrective mechanism that if this guy went or if this lady went overboard,
#
there is a collector who would call council and sort of put a little more sense and patience and
#
balance into that person. I think on an average, this worked and this worked well, because for
#
instance, in Karnataka land reforms was a major part of the subdivisional officers work on an
#
average sort of average week in an average week, four days out of my five, I would hold land
#
tribunal sittings in those headquarters, I would go there. And with a bunch of two other four other
#
members who are nominated by the government, some of them would be politicians, some of them
#
would be local lawyers, one of them would be an academic, you decided on restoring land to the
#
tiller, taking away ceiling surplus land and distributing it to the landless. So this kind of
#
work did require the kind of character that I described, brash, impetuous, convinced that
#
what needs to be done needs to be done. Even if I'm, you know, cutting the corner,
#
evidence on ground with record that you are the tiller is thin. But I know in my bones,
#
you are the tiller, because when I was talking to the landlord privately, he did admit,
#
that sir, this was my tiller, but those days we didn't have written tenancies. And I made sure
#
that his name was never entered in the land revenue record as the tiller. So I know the
#
truth, boss. And I know the truth. And therefore I'm going to restore this land
#
to the tiller. I know full well that this guy will go in appeal, but
#
so I'm doing justice. So this was, in a sense, the wild west type for want of a better
#
characterization approach of the civil service. And I think this was by design.
#
And were you brash and impetuous?
#
I would, I don't think I'd call myself brash and impetuous, but I would take on,
#
I recall one specific instance where this gentleman, sad looking person, would come
#
and stand outside my subdivisional office every day. He wouldn't be able to explain what his
#
problem is. He wasn't able to speak very well. He had a physical disability. In addition,
#
he wasn't very articulate. It took me a long while to understand what is going on.
#
In reality, what is going on was his land had been appropriated by a powerful local person.
#
They belong to the same community. They were actually distant cousins. This guy had been
#
deprived of his land illegally. The matter had gone up to the Supreme Court and this poor fellow
#
had won. But the documentation was horrible. It took me something like 18 months to reconstruct
#
the file. We managed and my office was totally with the opponent. So it took a lot of effort.
#
I had to take on the office, but they fall in line quickly and I had a lot of training.
#
So I could understand the nuances of the case, but to cut a long story short,
#
I got on top of it in 18 months. Now it required a physical dispossession of a very powerful
#
local landlord of irrigated sugarcane land. So which means you're talking about great value at
#
stake. I put this gentleman in possession and it meant quote unquote being brash, being impetuous,
#
because the police guys came and said the constabulary that we have is inadequate.
#
We need the armed reserve. I said, who's going to give me armed reserve for putting one person
#
in possession of land that belongs to him? I can keep writing letters. I did. We haven't got a
#
response. The police said you have to be ready for the consequences because there may be a
#
law and order problem. This is a standard response of the system. I said, I'm ready.
#
What will be the worst case scenario? We may have to let the charge. I'm ready.
#
It can get worse. You may have to order tear gas firing. I said, I'm ready. So we landed on an early
#
fine morning, about 5, 5.30 a.m. It's great in retrospect. By 5.05, we had put him in possession
#
and the landlord yielded with such complete lack of resistance that I was beginning to wonder
#
if this is a setup. It wasn't. Actually, the might of the Indian state,
#
when it decides to implement the law, is actually enormous. But I think it requires
#
you to do it. We don't do it very often. It is also very interesting. Once we did that,
#
50 other disputes in the subdivision, which had not even surfaced in my 18 months, surfaced
#
and got settled in no time. So display of authority, impetuousness, and impatience has
#
its value. By temperament, I'm not that. But when we had to do it, it was a similar occasion in
#
another tale of mine where there was a dispute between drinking water versus irrigation. This
#
is another standard Indian problem. When you have a drought here and you have a source of water,
#
which is used for irrigation as well as drinking, there will be a dispute and it's a very difficult
#
dispute. There are standing crops. So if it was fresh sowing, the decision is easy. There is a
#
standing crop. You have to do some arbitrary distribution of water. All your scientific
#
formulas go for a six. These are marginal farmers. These are not exactly large landlords,
#
large landholdings. So you have to distribute the water and you have to do some rationing.
#
The rationing gets complicated because there are caste factors. Typically, the intermediate
#
landholding community holds the land. A bulk of the drinking water deprived sections would be the
#
SCST, the OVC. So caste comes into play. We had to do a police firing to make sure that the drinking
#
water actually got released, but no deaths, fortunately. So there have been occasions.
#
There was also a very not so pleasant occasion when, if you remember, and I don't want to
#
elaborate on it, the famous wrath moved in the early nineties. I had to prevent the wrath from
#
coming into my district. How did you prevent the wrath? I told Mr. Advani that I will not let him
#
enter my district. And Mr. Advani said, you'll have to legally impose it on me because if you
#
tell me that you're not letting me enter into your district, I will enter your district.
#
So you'll have to impose, you know, a formal legal prohibition. I said, I will. I did. And he said,
#
in which case I will not violate your order. And he went into the neighboring district where we had
#
two police firing deaths. So we, one has been on the verge of it. Fortunately,
#
unlike some of my colleagues who got drawn into this because these are very messy. Once they happen,
#
you can't control anything. There is a judicial inquiry. You get bogged down for six years,
#
eight years. I was lucky. I think it's that 50% 70% luck component, but yeah, close enough
#
to be being brash and impetuous, but not entirely being brash and impetuous.
#
I love the way you talk about the brashness and the impetuosity as something that is often tactical,
#
but not temperamental, necessary that, you know, if that's what you need, that's a weapon that
#
you use. I also want to ask about the first few years in the IAS unit fieldwork. And I want to
#
ask about what those experiences were like, because it strikes me that when one gets into,
#
you know, something like that, you get in there with certain ways of looking at the world and
#
certain frames of evaluating everything, and then they collide with reality. And then if you're
#
nimble enough, you have to keep changing all of those and, you know, get a more nuanced
#
understanding. So, so tell me about how that process was like for you. There is almost
#
a world view changing realization that dawned on me as a subdivisional officer. You know,
#
a lot of the states passed a legislation called Prevention of Transfer of Certain Lands Act.
#
High sounding title. It simply is the following. Lands were granted to,
#
let's say, the Shadal caste, the Shadal tribe communities. The attempt was, these are people
#
who are poor because of landlessness. There was a strong view in Indian economic development,
#
which nearly equated poverty with resource poor. You're poor because you didn't have land,
#
if you're in rural India. So, simplistic, but made sense because land was the primary source
#
of living. So, a lot of public land was then distributed to the SESD community. Now, the
#
reality was public land available for distribution was after the best parts of public land had
#
already been encroached upon and typically by the landed and the powerful because they were the
#
farmers. So, what was left undistributed used to be, you know, hillock, rocky areas, which were
#
not easily cultivable. But the process had sort of people had gone through the process.
#
Lands had been distributed. So, X got Patta or title of land, five acres, four acres, three acres.
#
Very often, X actually wasn't a cultivator and agriculture and farming is as risky,
#
probably even more risky as an entrepreneurship activity as running a factory, running a shop.
#
You have to have excellent knowledge of the technical side of farming. Then you have to
#
be an entrepreneur in terms of buying your beach, buying your fertilizer, doing your costing,
#
being able to sell at the right time. And it is a lifetime of learning, which makes a farmer,
#
a farmer and a good farmer. So, it turns out all these are a bulk of these guys who got these
#
transferred, granted land, ended up selling these lands. And they sold it to whom? To the
#
same landlords who were the existing farmers back to the, you know, circle of penury.
#
What did the Indian state do? The Indian state, using this notion of law as an instrument of
#
social change, passed a law which said we will restore the land back to the original grantee
#
because there was a clause in that grant which said you can't alienate the land.
#
This land is given to you. It's meant to be kept by you. You violated the alienation condition. So,
#
the guy who bought it is deprived of the land. It's given back to the original allotee.
#
So, this act was passed and it had retrospective effect. Meaning, the 1950 grant, you sold it in
#
56. This law came into being, let's say, in 1976. In 78, the original allotee or his successor in
#
title could come and move the subdivisional officer's court and say, please restore this
#
land back to me. I had tons of these cases and I plunged into it with a vengeance. I knew law.
#
I understood law and here the evidence was terrific because the land had been granted
#
by the government. So, there is an instrument of land grant. You also have a copy. He has a copy.
#
It's a very simple decision. Was the land granted? Yes, sir. Here is the land grant order.
#
Is the grantee a schedule caste or a schedule tribe person? He belongs to one of these. Yes,
#
sir. Here is the certificate. Has he sold it? Yes, because it's registered. The sub-registrar
#
has the sale deed. Is the purchaser here? Yes, sir. Regardless of the value that the purchaser paid
#
and the tragedy would be the purchaser would have spent another couple of lakhs, sunk a borewell,
#
converted this rocky place into a lovely coconut garden and here you are restoring it.
#
So, I said the law is very clear. It's restoration. So, we restored it and I took out thousands of
#
cases that had been pending thinking my predecessors were either corrupt or were
#
inefficient. They were not probably dedicated to the work and I restored these literally in
#
hundreds and thousands. I would hold sittings because the evidence is mechanical. Order is
#
passed and one of these evenings I finished and I'm walking home. The subdivisional officer,
#
the town is a small town. Your house is a few minutes away and I thought I saw two guys who
#
looked very familiar. Who were they? The dispute parties whose case I had just decided I had
#
restored and I hung around. They didn't realize who it was because in the court you sit with your
#
black coat and you're walking now in semi-civilian clothes. They didn't realize who it was and they
#
are talking to each other in Canada. What is the talk? The grantee and now grantee is grandson
#
because this is 1950s is taking the first advance of an agreed payment saying give me 50,000 bucks
#
now. The balance two and a half lakhs. So, total amount of three lakhs. I am ready to give you
#
three months time and the landlord who has been sort of deprived of land says no boss three lakhs
#
is too much. They then settle on 250. So, I shall give you the balance two lakhs later
#
and they signed an agreement which they agreed will not be registered but will have moral force
#
which will let the landlord continue in position. So, I walked home wondering
#
I have spent the last two years passing 1000 orders on restoration of lands to SCST
#
on the basis of the original grant and here is this guy agreeing to undo my order for a consideration.
#
Perhaps in one sense social justice is getting done. This guy is getting cash and I watched
#
the person who received the money walked straight to the liquor vent sat and must have finished off
#
the money in the next whatever one or two years or one or two months made me wonder you know this
#
whole notion of social justice law which restores land back is it doing any purpose at all? Is it
#
serving any purpose at all? So, one began to then question this whole paradigm of development which
#
is use law give assets and the belief that somebody who is not an entrepreneur can be made into an
#
entrepreneur by a state fiat and I think began to think about is this the right way of development?
#
I sort of elaborated on it at some length because every state in India still has on the statute book
#
this legislation called prevention of transfer of certain lands which is completely against
#
any principle of equity namely a purchaser for consideration
#
in a market transaction should not be deprived of his right to property by some artifact created
#
by law. The state creates this artifact that you can't alienate restores it back but in reality
#
no restoration takes place markets continue to rule so in one sense that night is when
#
I began to rethink on the state versus markets debate. Is there a big lesson in this incident
#
about a meta lesson about the state's belief and I would consider the state's delusional belief
#
that it can transform society from the top down? I think there is and you know in India's case it
#
is not only the state quote unquote delusional belief but the instrument chosen was a legislation
#
and over a period of time I have begun to sort of you know come to this belief
#
the contempt for law that a lot of India has is an account of these legislations. We legislated away
#
our problems without confronting the reality. The reality is there is a bunch of people who are poor
#
primarily because they have not had access they don't have good health they don't have education
#
they don't have assets also but if you just give them assets by fear of law and you actually then
#
you know it's like lazy banking this is the state's lazy ill-thought-out solution
#
to a very deep problem which required hard work the state should have put in hard work
#
handling child health women health and it would be transformation only over a period of 20 years
#
so I think the state wasn't entirely stupid I think the state was also in a hurry it's probably
#
well meant it was well intentioned that by one legislation I will transform but I don't think
#
these transformations happen I think they cause in in hindsight clearly they cause a lot more
#
problems than they solve so I would completely agree with you it's delusional and also assuming
#
away problems in the 80s and frankly even today there is this sense within the state that they
#
have to be adversarial towards markets and that in many contexts you're presumed guilty to begin
#
with and you know and that's just like a standard mindset and how did this mindset begin to change
#
for you like I have heard about your early experiences with a private sector water vendor
#
which happened to be a French supplier and there was outrage about how can an essential
#
service be provided for profit by a foreign company you know these three things at once
#
and what were your experiences both in terms of one challenging whatever your own preconceptions
#
might have been challenging conventional wisdom and then fighting the system to do what you felt
#
was right this early experience that I mentioned about this land restoration you know clearly
#
began to sort of sow the seeds of questioning state-led development development isn't being
#
questioned you know the need for development the need for poverty alleviation was never in doubt
#
question is what are the appropriate instruments and is necessarily public policy interventions
#
and heavy-handed legislation the way to resolve this from that let me jump straight into the water
#
area as md of the karnataka urban infrastructure development and finance corporation one of the
#
mandates was improve city water supply and this was uh 2000s this was in the early 2000s
#
i just come out of my phd which is on water use of markets for financing of urban infrastructure
#
and by now more or less convinced about the other aspect of economics namely
#
there is markets there is market failure and therefore there is state intervention
#
and my textbook economics and sense stephen's economics stopped here life taught me something
#
which i learned subsequently is also part of excellent economic theory namely state failure
#
failure so you started with markets you had market failure you got state intervention
#
and assume state intervention has solved things i saw at close quarters the reality of state
#
failure so if there is market failure and there is state failure what do you do clearly you need to
#
now figure out a solution which is a marriage of successful markets and potentially successful
#
state so this is the context in which we are now handling hubli dharward belgam and gulbarga water
#
supply hubli dharward at that time got water once in 18 days for half an hour a day i mean on that
#
day once in 18 days and in some localities whatever would come from 3 to 330 am and in
#
some locality they would come at 12 at midnight clearly the population was desperate because
#
how much water can you buy and if there is no near good source of water the water that you buy
#
is also contaminated clearly putting more money into karnataka urban water supply drainage board
#
or hubli dharward municipal corporation didn't make sense because one look at their past showed
#
you that every year he was spending some you know unmentionable crores in beefing up water supply
#
so quick calculations showed that the bulk water that is being pumped into hubli dharward
#
in terms of lpcd to use the jargon liters per capita daily was
#
twice or thrice what paris was getting so clearly this water is going somewhere bulk of it is just
#
physically leaking an account of poor infrastructure but a lot of it is also
#
leaking in terms of revenue what is being sold money is not being collected
#
and the world at this time is already beginning to look at private sector participation in water
#
clearly given the sensitivity and the agitations that one read about you know these had been tried
#
earlier both in india limited but in a lot of latin american countries the moment you touch water
#
and bring the private sector there is huge pushback and the pushback is understandable
#
because you don't want somebody to gain on account of your misery if poor water supply is a reality
#
bringing in the private sector to improve almost sounds like you are letting the private sector
#
benefit on account of the misery of people so a lot of brainstorming excellent teams
#
phenomenally good counterparts in the world bank junaid ahmed for instance who is now a vice
#
president in meagre in washington was in something called the wsb water supply program of the world
#
bank in delhi which was not the investment arm of the bank which is the intellectual you know the
#
thinking arm of the bank sat with them figured out one way to handle this is the private sector
#
does not have tariff setting powers if the private sector is setting tariff your program
#
has failed even before it starts but if the private sector is not setting tariff
#
how do you square your books so we came up with a program where we said you have to demonstrate
#
to people that there are efficiencies that the private sector can bring which will improve the
#
water supply and the water supply system will be superior to what the municipality is providing
#
but we assure you that we know till we demonstrate that this happens the tariff is frozen
#
so existing tariff which is not even recovering recurrent uh you know the revenue costs of water
#
supply will continue because give us 18 months after we complete the project where we demonstrate
#
to you 24 by 7 uninterrupted water supply at the end of it will you agree to volumetric pricing
#
is the question that we post interestingly the current deputy chief minister of karnataka
#
mr came and mr dk shivkumar was the urban development minister he when i presented this
#
in the hubli dharwad municipal corporation he and the entire municipal corporation literally
#
rolled on the ground saying you must be loony you're promising 24 by 7 water supply in a city
#
which gets water once in 24 days so do you know what you're talking about i said i am
#
18 months of construction after completing construction we will do this only for a
#
demonstration district in that demonstration district we will seal it off in an engineering
#
sense and demonstrate that every house will get 24 by 7 water at the current rates which was some
#
30 bucks per month per household we will not increase the tariff if we demonstrated for 18
#
months from the point of completion of construction which means for you know a total period of 36
#
months at the end of the 36th month are you guys ready we will keep out capital costs we will only
#
ask you for running costs volumetric pricing they said yeah we will give it to you right now
#
because we are 100 certain that you will fail so we got a municipal resolution saying at the end
#
of the demonstration period if it is what you promise it to be we will agree to volumetric
#
pricing i'll cut out the details we did it it got done after i left we completed the engineering part
#
we went through a procurement process which was tortuous but there again we did a very interesting
#
innovation consultants are typically not great at identifying what is the problem of a running water
#
supply system because they have never run a water supply system you actually need water supply
#
operators to come and tell you but water supply operators want to operate water supply they don't
#
want to be consultants so we persuaded the world bank please allow and and please fund a study
#
which will be expensive because water supply operators will dig will need to go and look
#
at the quality of buried assets to be able to assess is the system good they will be expensive
#
they will be maybe five times more expensive than consultants my state government will be
#
not willing to fund it the world bank agreed and we got a law firm to come and do the contracting
#
which is a complicated contracting and that again is an interesting story the bank insisted that no
#
indian law firm can do this so he said if this is going to be done for the next 20 30 40 years
#
in india as you are claiming it will don't we need capacity government needs capacity but so does the
#
private sector so we insist that we will only go with an indian law firm it's now a very famous
#
law firm then a fledgling new startup it's called yeah and rahul mathan who is now a rock star
#
in the it digital world his co-founder akshay jetley was on the show akshay is a childhood
#
friend but rahul was the bangalore-based partner i remember i called him rahul mathan was very
#
polite he said sir i don't think you can afford us we are a private law firm
#
and you are a government company and we will not be easily procurable because we won't fit
#
into your l1 l2 type criteria i said it's a sole source procurement and i'm not even negotiating
#
with you your cost so are you sure i said yeah he showed up we signed him up we therefore you
#
can imagine it is a very supportive government mr sm krishna was the chief minister he practically
#
gave us carte blanche and said do it and we had the the thancha the cover of a world bank project
#
which gives flexibility if the world bank partner is smart and understands the situation so i'll
#
you know necessarily out of interest of time cut out the details we got an excellent law firm
#
to do the contracting we got an excellent water operator to do the current state of the water
#
supply study so we planned our investments very logically because this wasn't a consultant who
#
is a theory type person this was an operator a water operator who came and said these are the
#
hundred things that you need to do to seal off this and provide 24 by 7 water supply
#
the demonstration districts of hubli darward belgam and gulbarga within the stated time
#
as i said i had moved out but within the stated time demonstrated a 24 by 7 water supply the
#
project was meant to lead to a follow-on project where the entire city would become 24 by 7
#
that took much longer than i had hoped for but i now understand it's currently underway
#
here's a question you know i've i've spoken to recently uh in january i think this year another
#
young is officer ashutosh saleel and he told me about his adventures of doing what he does
#
and again it seemed to me there that he was an outlier among his peers that he had to do various
#
kinds of yoga or show initiative in different ways to make little things happen and even in
#
this story you are going as far as i can see beyond the bounds of what any most of your peers
#
would do where you're thinking innovatively you and you know you're investing in it much more
#
passion than i typically expect from a government servant and perhaps i'm a little wrong there
#
but it's it still seems to me that you are a bit of an outlier and a system cannot depend on outliers
#
a system has to have good incentives baked within it and you know in all the episodes
#
that i've done about the 91 reforms for example whether it's with montaic or you know ajay spoken
#
about those times and the sense that we get is that there was a remarkable ecosystem of reformers
#
starting perhaps from the late 70s onwards manmohan bringing back montaic and you know
#
rakish mohan and all the other people in 91 and in a future generation people like you and ajay
#
and various others and and and there's a you know all of these really committed policy people
#
bureaucrats working together to make things happen but the question that i have this quieting question
#
that i have in my mind is that are these outliers you know did they manage to change the system in
#
such a way that it becomes a force for good naturally it doesn't matter who is the person
#
in office you know the state does what it is supposed to which is serve the people efficiently
#
and so what is sort of your sense in that was it a lucky accident and a perfect storm that all these
#
people thinking about reform in the right ways happened to collect in a right place right time
#
kind of way or do you feel that no it is deep rooted and we should not you know give up hope
#
and and secondly you know what about the system itself i mean do we always have to work in spite
#
of the system in spite of prevailing intellectual fashions or is there a chance that that deeper
#
fundamental reform there can happen answer is yes and no i yes to the the primary point
#
you know to quote ajay shah he very often you know we do a lot of lectures together on state
#
capacity we do this in masuri academy we do this in law schools we basically run the keel karsha
#
book and ajay has this lovely phrase the great man theory you can't run an entire apparatus
#
based on we will select or the you know the great man or the great person will come and implement
#
it you have to build systems on quote unquote average people working with average incentives
#
coming through the average process being able to do exactly what the system needs so to that
#
extent i agree with what you said but i disagree with you that we are outliers and i'll explain
#
that a little bit there are enormously large numbers of entrepreneurial civil servants
#
my own batch i can recall very large numbers who've done the kind of things that i am describing
#
the ethos of the civil service and i suspect it is changing now the ethos of the civil service is
#
invisibility we are supposed to do our work what i did in water supply or what i did in
#
you know that restoration of lands is my routine i don't believe i need to tom tom about it
#
i did not tom tom about it when i was doing it a fortunately there was no social media i say
#
fortunately because i think if it was there there will be a natural temptation where the person then
#
becomes larger than the activity and the cause i am speaking to you about it maybe half my peer
#
group isn't actually talking to you so i do not agree with you that i am an outlier there are
#
very many and i can you know recall and start listing them who've done far far
#
more entrepreneurial things we don't know about them we don't talk about them
#
two the system if it's constantly producing outliers there is something right with the system
#
so it is the system which generated a monte calvalia a rakesh mohan a whole bunch of other
#
reformers and the indian state has constantly been bringing these people who look like disruptors
#
we didn't include bimal jalan you know bimal jalans have i think single-handedly changed the
#
external accounts external capital management of india you know the current account being
#
completely open is something dr bimal jalani did quietly without any
#
nobody knew about it that's the way he worked now these are people who've populated our systems
#
periodically and continuously so a system which produces such people clearly is not a
#
dysfunctional system therefore will i say that everything is fine and and you know we don't have
#
to worry no i think the problem that worries me is there is enough of a what's the right word
#
there are dampeners in the system where if this thing had not succeeded and if i had been punished
#
i would never have attempted another serious reform in my life i was lucky i my experiments
#
succeeded but the ecosystem in which i was operating you know i we spoke at length about
#
the water privatization project even earlier i created and i you know i don't want to hark back
#
to the i i am saying i created because we are talking about my own experiments multiple people
#
have done far you know more things one of the identified constraints on infrastructure development
#
was when we tried private sector participation the reason why ppp didn't take off initially
#
you had a project desire you didn't have a clear project idea so i knew i wanted a road from point
#
x to point y this was a desire if i wanted the private sector to participate in this i needed
#
a project preparation facility which created a document which said road from point a to point b
#
this is the length these are the identified risks there is a land acquisition it will run through
#
forest so for the private sector to come into this project i needed more than just this desire of a
#
road from point a to b so this is not a risk the private sector will undertake the preparation of
#
this project document and the current cm of karnataka was my finance minister i presented
#
the idea to him he signed off and took the idea to cabinet karnataka created id eck infrastructure
#
development corporation of karnataka with idfc as partner and equity of the state equity of idfc
#
we created this company which would be given grants by the government of karnataka to prepare
#
detailed project reports so that when you went to the market you went with a bid document which made
#
sense to the private sector now this is entirely supported it took persuasion it didn't meet with
#
resistance i had to prove to the hierarchy that this is workable or it is at least worth an attempt
#
we did it today we don't need an idc when you had to kick start ppp's in the infrastructure space
#
you needed an idc the system completely supported it i am giving you my examples there are
#
innumerable such examples where the system happily supported you had to articulate you had to
#
make a consistent coherent document which got accepted by the process so the point i'm making
#
i needed to master the bureaucratic process of getting this through
#
because remember governments are equally about accountability as they are about outcomes because
#
it's public money so i can't allow somebody to come and do fancy experiments because of somebody's
#
pit you know theme it has to be justified explained and somebody has to sign off because
#
it's public money with the understanding that an honest attempt leading to failure will not be
#
punished somewhere along the way this protocol got broken an honest attempt which failed led to
#
cag cbc cbi and somebody then who went through this you know ringer didn't attempt entrepreneurship
#
again i think what we need to restore in government what you called outliers were not outliers there
#
were entrepreneurial civil servants who experimented who tried most of us were lucky we
#
succeeded we didn't have to go and explain why did this fail was there a sweetheart deal here
#
etc etc those who had to face these decided to be very you know correctly
#
they were very risk averse thereafter and a whole bunch of them watching them decided to be risk
#
averse but a lot of us who did not fail and were lucky continued i continued the same spirit in
#
capital markets i continued the same spirit in land you know resources and in skills in skills
#
i pushed and created a regulator for skill development the idea is simple it's a national
#
labor market so you need national certification so this utarakhand cook that i spoke about
#
in grand suites is a word of mouth certification so when you want to hire him you check with me
#
but increasingly you can't call krishnan and check you may not even know the previous employer
#
you need micro credentials third party unimpeachable third party certification
#
of skills this was the simple idea in this government we piloted it through the bureaucracy
#
we created the national council of vocational education and training where incidentally
#
nip fp team led by ajay shah was our academic research consultant they helped us design
#
the cabinet approved ncbet is functioning so i am repeatedly going back to my own examples
#
because i can speak most confidently about them but there are innumerable such examples
#
there is enormous entrepreneurship in government the government needs to continue to nurture it
#
by not penalizing bone of id failures if it does that the outliers will continue to
#
flourish in the system and i'm actually perfectly happy to have you insert the eye in there as much
#
as you want because i think from the canvas of your experience we can paint a picture of the
#
world so that's it's perfectly fascinating to me and i think all my listeners and except that i
#
don't want it to become an ego trip you know i'm i'm already worried about i can assure you it's
#
not i mean you know it is me who is asking you to do this so not you who is insistently inserting
#
an eye and i do in fact want to now ask you to insert not one eye but two eyes in this and
#
compare two k.p christians and one is a k.p christian who's just joined the ias before he
#
does his field work and the other is the one who's kind of finished the field work and is
#
moving on to the center and moving on to higher order thinking and how do these two people think
#
differently about the world in what way has the first one changed to become the second one
#
the ias i think is designed to ensure i'll speak confidently about the ias but what i say about
#
the ias is equally true of the ips the forest service the audits and accounts the income tax
#
i think the design is you do your training the brash impetuous impatient youngster who is
#
income tax officer if he or she is from the revenue service who's an assistant commissioner
#
or a sub collector if he or she is from the ias does this becomes collector become you know
#
prior to that becomes an additional collector development becomes collector and has a very
#
good understanding of the cutting edge of how this works so i now in the fifth year of service
#
fourth year of service have a very good sense of this famous k.p tcl karnataka prevention of
#
transfer of certain lands act how it works and i've seen the reality i've seen the theory in
#
massouri i've read the law and i've seen the practice in my subdivision pandav pura so i'm
#
actually very well placed to be what is typically the posting in most states ahead of the department
#
after you've done your field work you are director food and civil supplies or you are director land
#
reforms which is the field functionary or you are the number two the deputy secretary in
#
department of revenue now contributing to the amendment to the karnataka prevention of transfer
#
of certain lands act so you bring in a lot of your field experience you're contributing but
#
you are not yet the secretary to government who finally will sign off on the legislation
#
before it goes to the hierarchy so the field experience the additional head of the department
#
or actual head of the department deputy secretary experience all then now start adding to your
#
policy analysis capability so you are weighing pros and cons you know the need the need is
#
development of the scst or the obc or the poor generally who are not endowed well in terms of
#
resources and assets so you now need to design so you are designing programs you are designing
#
policies you're contributing to the design of policies based on this field knowledge in my case
#
after my field experience i actually landed directly in delhi because ninth year my wife
#
who's also from the service had been sort of picked up and posted in government of india delhi
#
so i in a sense bypassed the normal route i would have normally been you know an hod i had
#
done a deputy secretaryship in agricultural cooperation and had done a two-year stint in
#
commercial taxes which is very very revealing because you saw the quote unquote a side of the
#
private sector that you don't normally see the private sector that is evading taxes the private
#
sector that is repeatedly using the same document to ferry goods so it's doing illegal stuff
#
because this is also a side of the market that you and i should be aware of markets like people
#
are not entirely good are not entirely evil it is exactly the normal distribution of people
#
so there are guys who are trying to evade there are guys who are trying to stick to the rule of
#
law so one saw that and landed in delhi as private secretary to the minister of state
#
for personnel public grievances and administrative reforms and that was another fascinating journey
#
because this is india that is quote unquote reforming this is mr narasimha rao as prime
#
minister dr manmohan singh as finance minister and yours truly in a department which doesn't
#
sound like it's the most happening place it does you know these very bureaucratic postings and
#
transfers of civil servants and i'm private secretary to the minister where the minister
#
is the prime minister so that's where i've landed and great window to what is happening in delhi
#
because the minister attends the council of ministers so you get to see the agenda for the
#
council of ministers and since the pm was the cabinet minister this minister of state ended up
#
actually doing a lot more than average ministers of state average ministers of state would be with
#
a full-time cabinet minister who won't typically delegate a lot to that minister of state
#
mr narasimha rao as prime minister held many portfolios often because exit resigned he was
#
holding that portfolio interim but in addition personnel science and technology those days
#
atomic energy and space would always be with the pm and the pm decided that mrs margaret alva would
#
help him as regular minister of state for personnel but also help him in the discharge of parliamentary
#
duties of space and atomic energy and those days it included electronics what is now called meti
#
so as ps to that minister it's a terrific you know bird's eye view that you get which you typically
#
don't get in the ninth year of service in the ninth year of service you are a deputy secretary
#
so it's actually a worm's eye view that you would get the micro view but as ps to minister you are
#
actually sitting at the top as the at the apex so you get to interact i remember with mr whithill
#
celebrated cvc who passed away recently he was the secretary of the department of electronics
#
mr gopal swami who became chief election commissioner was joined secretary electronics
#
and atomic energy and space had those you know very larger than life secretaries who i remember
#
a particular incident i think it was dr chidambaram who was the chairman of the atomic
#
energy commission big man and there was a start question number one start question number one if
#
you know the jargon is a question which is for oral answer which means supplementaries can be asked
#
question number one means it would 100% get taken up because it's the first question
#
and as is human nature first question would also be disproportionately more time than the other
#
questions the speaker will be indulgent and more supplementaries will get asked than the last
#
start question so question number one and it was about theft of some nuclear spare parts
#
and those spare parts ending up in iran or iraq or some such place so sensitive question
#
mr narasimha rao announced internally margaret you will handle it now you don't handle the
#
files of the department because you're not minister of state so you're not familiar with
#
the details but you have to handle the parliament and supplementaries would be asked and supplementaries
#
can be in such depth that if you don't handle the files you may be lost for details you don't want
#
to make a fool of yourself in parliament so we were advised get yourself thoroughly briefed
#
you said yes we'll get ourselves thoroughly briefed so we requested chairman atomic energy
#
commission is a person who only deals with the prime minister and they don't normally ministers
#
of state are you know not big enough margaret alva said sorry the chairman has to show up i will not
#
get briefed by a joint secretary so kheechatani long story so he we persuaded him he shows up
#
and he said but i have a flight at 3 30 so i'll come at 130
#
so briefing at her house 130 so we are sitting down chairman atomic energy commission starts
#
briefing and he's also conscious that he doesn't want to reveal too much because this is a sensitive
#
strategic topic it may not have been theft at all it may have been foreign policy so it's
#
all very diplomatically worded we are going through this briefing and mrs alva keeps getting
#
telephone calls in the meanwhile from inside the house and somewhere along the way she looks at
#
dr chidambaram and says dr chidambaram i'm sorry my son has failed in his hindi exam
#
and his tutor is here it's very difficult to get a hindi tutor and the tutor and the son are fighting
#
and i cannot let this guy fail again if you are in a hurry i am sorry nuclear energy can wait you
#
can leave i need to go inside sort out the fight between the teacher and the tot until i restore
#
peace there i am not able to come here because my mind is not here if you are in a hurry please leave
#
and she left to go attend to her son dr chidambaram looked at me
#
and said i think she has her priorities right i'll wait wow so he told this fellow cancel the flight
#
then he looked at me and said can you get me some lunch it's 130 so he said yeah we'll organize
#
some lunch so we quickly organized some idli vada he stayed till 4 30 she came back after
#
having restored peace between samtrupathi ji and young mr alwa and stayed there three and a half
#
hours great briefing and we learned a lot so that stint you know the bird's eye view and we continued
#
learning one would not ordinarily get exposed in the ninth year of your service to atomic energy
#
and mr narasimha rao had another great practice for starred questions on the day of the question
#
the questionnaire i think was 10 am or 11 to 12 i can't recall an hour prior to that so if it was
#
11 to 12 10 to 11 mr narasimha rao in his parliament house office would take a briefing
#
so he'd be briefed on five questions just one to five he wouldn't answer them they would be
#
answered by the relevant moss he would brief himself so that if a supplementary went out of
#
hand and the minister was struggling he would sort of stand up and answer because when the
#
prime minister answers the house typically listens and he'd be able to handle it and he ought to you
#
know also a wise experienced person so we thought the purpose of the briefing was this
#
and i discovered later it was also a great managerial tool he would sit there like this
#
you know with his eyes closed and you thought he was sleeping and he's absorbing every word
#
so the question would be something about how is allocation of carders in the northeast done
#
can a single woman officer be posted in the northeast or some such question and he would
#
use that opportunity and when the secretary is briefing him he would ask him one question here
#
one question there sometimes not only confined to carder allocations it will be on ia's exam
#
and he was constantly a updating himself on what is going on more important updating himself on
#
how well informed and capable is this secretary joint secretary because once twice we would
#
notice a supplementary that narasimhara asked the secretary wouldn't be able to answer satisfactorily
#
and you'd forgotten about it three months later that secretary would get replaced
#
so the old man was clearly using this as a managerial tool updating himself doing personnel
#
decisions of government of india and literally three months later one year later the jigsaw puzzle
#
puzzle began to sort of fit in so great learning and and i don't want to name names
#
at least two secretaries who fumbled and who clearly were inadequate and who had been placed
#
there on account of their civil service friendships were sorted out by mr narasimharao and replaced by
#
more capable people entirely thanks to this 15-20 minute briefing where he sized them up
#
so great three years great learnings remarkable that someone can actually have the ability to
#
absorb information quickly and ask supplementaries that can make some more fumble you know that is
#
again not a skill to be taken lightly and i enjoyed vines sitapati's book on narasimharao
#
vines been on the show a couple of times was he an outlier who narasimharao i don't think he was
#
an outlier at all because i've seen subsequently i've seen mr pranam mukherjee at you know he was
#
my minister his finance minister i have seen him answer a parliamentary question you know this was
#
the satyam episode and there was a series of parliamentary questions including on
#
the role of foreign institutional investors and things like that a lot of these were clearly
#
the post-91 post-2001 actually development with which mr pranam mukherjee wasn't entirely familiar
#
but a great wise experienced man who could process a lot of unrelated knowledge unrelated
#
facts into a coherent narrative so he answers he stands up and we've tried briefing him on the
#
nuances of depositories foreign institutional participation and you know those receipts what
#
are they called you know foreign institutional investors issue receipts based on their holdings
#
on which there used to be a storm in parliament so the supplementary has been sorry the main
#
answer has been placed in the house it's question number one again and learned member gets up and
#
asks a very complicated question about was there a negative not so desirable role played by a foreign
#
institutional investor and i'm getting worried because i know this is a complicated question
#
and i'm 100% sure mr pranam mukherjee does not know the answer and the time is not enough for
#
me to write out the you know cheats that joint secretaries sit and send to the minister i can't
#
capture all the nuance in a chit and i'm still struggling what do i write in a small chit which
#
can answer i haven't yet finished pranam mukherjee sab got up and said i want to compliment the
#
honorable member on this very in-depth learned question now this guy is already jelly his
#
opposition pranam mukherjee spends the next five minutes praising him and then says honorable member
#
would recall when we were kids how we would save
#
house is confused you remember there used to be those small
#
pigs so we said pigs you remember those piggy banks we would put small coins into those
#
and we would save thrift was a great thing the current world has been taken over by greed
#
he didn't touch fiis at all but the entire house including the member who asked the supplementary
#
clapped sat down now you may think this is skirting the issue you may think this is
#
not accountability to parliament it feels like a rhetorical and political genius but not intellectual
#
honesty it is not at all intellectual honesty pranam mukherjee the politician was wise he was
#
handling a diploma you know a difficult question he didn't know the answer but the situation was
#
handled so i am using this as an example to just make a point namely narasimha rao was not an
#
outlier these guys were phenomenal politicians the same pranam mukherjee let me you know tell
#
you an intellectual honesty story here the pranam mukherjee sahab who stood up in parliament and
#
said bank nationalization was the best economic reform that india had seen is the minister we are
#
now briefing this is 2010 budget preparation we were asked come and get ready to present
#
reform ideas i wanted financial sector reform it's my passion one of my passions and
#
brainstorming with our team k boss this is the minister who stood up and spoke about piggy bank
#
he got away in parliament he's a smart politician but my interest is we want to reform the indian
#
financial sector greater market orientation greater legal certainty but this man believes
#
nationalization was the best thing so i had a brilliant deputy director mitra
#
youngster who was in charge of public grievances he said sir you remember we've been discussing
#
this ulip problem you're familiar with the unit linked insurance product scam which renuka sani
#
among others has worked on estimated that indian consumers lost rupees six trillion
#
in the ulips scam this is fresh and you know the wounds had not yet healed he had got a postcard
#
from some lady in west bengal complaining that she had invested in ulips and had lost her money
#
okay now he had that postcard which is in bengali he brought it so we sat and decided on a
#
conspiracy so we wrote a presentation and next morning mr pranamukherji's office is most reluctant
#
to allow us even 15 minutes because they were certain you guys will come and talk about markets
#
financial sector reforms mr pranamukherji is not going to give you the time of day
#
so why waste so mr pranamukherji is very polite he can completely conceal his contempt for you
#
with his external politeness and said yeah dr krishnan do you have anything i said sir we have a
#
three slides presentation he said really only three slides
#
so yes he said start slide one was this postcard which we had clicked as a picture
#
so i showed it for a second and moved it quickly he said no no no please go back
#
he started reading it out aloud it's in bengali only mitra and he know bengali
#
okay it is a heart-rending story this lady who was a school teacher in a
#
local body school it's not a government school panchayati raj school so not pensionable
#
she only gets an accumulated pf an accumulated provident fund that she accumulates an account
#
of years of service that letter said it's addressed to pranabda written and normally
#
you wouldn't have read it because one million letters of this nature come public grievance
#
cell would have received it forwarded it to somebody for necessary action and that's the
#
last you would have heard of it it said sharmishta gangopadhyay her name i had invested x amount of
#
money in u-lip of the life insurance corporation of india and i saw written there vasudhaiva
#
or some such slogan government of india emblem i put my money
#
entire money has been wiped out i have nothing now my husband is suffering from cancer i hold
#
you responsible signed sharmishta gangopadhyay he read it out he was grim absolutely angry
#
and you know this is something i have learned about indian politics indian politicians are
#
actually very sensitive to public suffering he is an old cynical you know 50th year in politics
#
backroom operator power play he was distraught and he looked at me very angrily he said
#
dr krishnan and this was a sarcastic dr krishnan what is going on here
#
can you speak in plain english i said sir there is a product called unit linked insurance plan
#
approved by irda offered by regulated entities which is not an insurance product
#
it is actually a mutual fund product but it is a mutual fund product with none of the safeguards
#
of a mutual fund because mutual funds are regulated by sebi this is an insurance product
#
regulated by irda so through the regulatory cracks this is a product which is legal which should be
#
illegal i didn't finish dr arvind virmani current member of neti io then chief economic advisor
#
looks at pranam mukherjee sahab and says sir i have lost six lakhs
#
pranam mukherjee sahab looks at him and says dr virmani you are a phd from harvard
#
he said yes sir i am a phd from harvard but this is the financial sector i've lost money
#
he said presentation over what do you want i said sir there are gaps and overlaps in the
#
indian financial regulatory system this needs to be covered who will do it i said government
#
and parliament what is required i said financial sector legislative reforms commission
#
presentation over give me a paragraph i wrote out the paragraph in that room
#
he read out that paragraph in the 2010 budget now this is mr pranam mukherjee completely
#
known to be socialist not exactly market savvy no sympathy for financial markets
#
but the moment it was public grievance indian public and i hugely played on that sentiment
#
i said she is basically telling you you call it irda you call it sebi you call it rbi you call
#
it anything you want for me this is the line emblem your fight between irda sebi rbi do i care
#
i am a consumer who is being thuggered by the indian government i hold you responsible
#
this point goes home like this with indian politicians with politicians and
#
of all people the person who constituted the fslrc is pranam mukherjee he announced it in
#
the budget he set up the sri krishna commission and it gave its report by then he had become
#
president but nobody would believe when i tried explaining that it is not mr chidambaram market
#
friendly financial sector savvy who constituted fslrc he received the report because by then
#
pranam mukherjee became the president of india but it is pranam mukherjee who constituted fslrc
#
so they are not outliers i think the indian democratic setup like the indian civil service
#
setup has a large number of entrepreneurial politicians i think we don't adequately
#
what shall i say exploit their public grievance public interest sense by tying up what they see
#
as a problem and what i know is the solution because i need to talk to him in his language
#
if i you know we till then we were doing presentations about the paper
#
that renuka sani and monica hallan had written which is entirely technical
#
sebi act irda act regulatory gap regulatory arbitrage so if i done a presentation
#
on regulatory gap and regulatory arbitrage i would have been thrown out of that room in two
#
minutes just i think luck some foresight mitra anupam mitra sharmishta gangopadhyaya that letter
#
and that postcard is imprinted in my mind that postcard led to fslrc there's a magnificent
#
lesson in this you know going with the going with what you've illustrated that politicians
#
are brilliant people responding to political incentives so we can't expect them to think
#
like us but if the problem here was pranam mukherjee the solution was sharmila gangopadhyaya
#
and maybe that's a lesson for reformers that we have to figure out how to get our message across
#
in the right way and not through technical papers and academic language and so on and so forth
#
on that note let's take another break and on the other side of the break we'll go much deeper into
#
your experiences thanks long before i was a podcaster i was a writer in fact chances are
#
that many of you first heard of me because of my blog india uncut which was active between 2003
#
and 2009 and became somewhat popular at the time i love the freedom the form gave me and i feel i
#
was shaped by it in many ways i exercise my writing muscle every day and was forced to think
#
about many different things because i wrote about many different things well that phase in my life
#
ended for various reasons and now it is time to revive it only now i'm doing it through a
#
newsletter i have started the india uncut newsletter at india uncut dot subtract dot com where i will
#
write regularly about whatever catches my fancy i'll write about some of the themes i cover in
#
this podcast and about much else so please do head on over to india uncut dot subtract dot com
#
and subscribe it is free once you sign up each new installment that i write will land up in your
#
email inbox you don't need to go anywhere so subscribe now for free the india uncut newsletter
#
at india uncut dot subtract dot com thank you welcome back to the scene in the unseen i'm
#
chatting with kp krishnan and actually this last break involved and the whole day we kind of you
#
know a day has passed since we kind of did that and i was just chatting with krishnan about you
#
know for the sound check i was asking him when he wakes up and it turns out you're a morning person
#
like all time rams like you said give me a sense of the routine of your days these days like what
#
is an i like i i love this quote by annie dillard where she says how we live our days is how we live
#
our lives and i feel as i get older that it becomes important for me to think about what
#
is an ideal day for me because essentially that is all of life you can be obsessed with the past
#
or the future but it is the day which really defines that and it's important for that to be
#
fulfilling so what are your days like and what is your ideal day like i'm a very structured guy
#
so my days are normally if you open my calendar my wife gets very worried often
#
she will see you know some random date december 26th or january 11 there will almost be a list of
#
activities that i have planned to do including for instance if it's a board meeting day
#
and let's say you're starting with board briefings at nine o'clock and and it's likely to be a packed
#
day i will constantly be looking for ways to steal time so i'm very keen about my yoga in the
#
morning equally keen about a swim in the evening and if i can manage a walk or a run when i'm in
#
delhi i play golf so factoring all this into a day is a challenge even after retirement so my days
#
are normally very structured so well before the day has begun i have my to-do list my day is planned
#
out typically begins quite early i earlier used to be almost clockwork 4am off late it's not
#
necessarily 4am it's between four and five and i'm the coffee maker in the house so it's almost like
#
the japanese tea ritual i take my coffee making seriously and it's done with a lot of effort
#
what's your way of making coffee there is only one way of making coffee if you ask a good regular
#
tambi he or she will tell you that there is your favorite coffee powder in our case it happens to
#
be a brand called kothas which is a jainagar bangalore brand and and a particular proportion
#
of coffee powder and chicory and the traditional south indian filter in which way you know sort of
#
top vessel you fill up with coffee powder ground to the right degree of coarseness
#
if it's very fine water will run through it if it's very coarse water will not pass through it
#
at all so the appropriate degree of coarse coffee powder and the right kind of filter because
#
the perforations in the filter and the size of the coffee powder granule you know have a relationship
#
so it's a filter that you are used to which you use regularly and absolutely boiling hot water
#
poured on top of the powder it percolates down into a receptacle where you get the decoction
#
and milk which is boiled exactly when the coffee is down in the percolator and the two are mixed
#
immediately you don't reheat the milk or the coffee then you sort of kill 50 percent of the
#
taste this is my style i'm sure you talk to 10 people there will be 12 styles so it starts with
#
coffee and typically immediately followed on days that i don't go for golf with a chanting of
#
almost a daily ritual in a lot of our houses and followed by some other small prayers in my case
#
immediately followed by yoga get ready breakfast and then plunge into the day's routine on days
#
that i play golf we play we have a regular set of you know two or three four balls we start
#
very early we like to be the first to tee off a because it's normally an easy slot to get
#
and two you have reasonable control over your time because you start early there's nobody ahead of
#
you your travel time is less so if it's golf i'm typically home after a nine-hole game by about
#
8 30 so winter months maybe 8 45 9 and then the day's routine what's been your approach
#
about leisure through the years because what often happens is that when we are young we can often be
#
goal-directed about certain things that i am doing x for y reason i'm doing a for b reason
#
and then one can one is often programmed in a sense by society or expectations to feel guilty about
#
you know just idle leisure time where you're doing nothing at all and i mean i love the john
#
lennon quote no time is wasted unless you feel it is wasted but what's been your approach to
#
about leisure do you actually calendarize and plan leisure keep in between this time and this
#
time i will do nothing how do you sort of approach that so you know during i'm not talking about
#
taking an you know an explicit holiday when it is actually completely leisure other than that
#
as i said my days are planned and i do keep a lot of time that one doesn't plan an activity
#
including not looking at your whatsapp so there is reading time i mean for instance we watch
#
my wife and i because bulk of the time it's the two of us at home but when the kids are here also
#
we have a regular our dinner is typically it's a dinner plus beyond always an hour of some
#
thanks to all these new you know forms of media an ott serial and currently we're watching
#
something fascinating called foils war it's about a police officer in the uk in a small town in uk
#
during the second world war doing his own battles of solving crime during world war two it's a
#
fascinating series because the backdrop is the second world war but all of serial is on the
#
crimes that are happening in a small town including murder and stuff like that and it brings out a
#
dimension of the world war that we didn't you know sort of immediately realize which is the struggles
#
that people were going through you know losing families there's no food there's complete
#
uncertainty so more less about the serial it's typically an hour of undisturbed ott watching
#
and and a lot of my friends get very irritated during the times that i take a break i don't take
#
calls i will actually do nothing else i may get up do a walk i may have a cup of tea but i won't do
#
any other activity so similarly we have a regular walk in the evening which is pure
#
you know leisure fun i don't carry my podcast i don't listen to music i in fact don't even wear
#
my specs because i and my wife walk and we don't like chatting you know if somebody stops me during
#
my walk i get very irritated i don't do it's husband and wife chatting but no serious stuff
#
so i do plan my leisure so at this point i have to tell my listeners and my writing students
#
especially my writing students how much i value them because krishnan had invited me to his home
#
this evening where kartik murlidharan who has been a frequent guest on the show will be there and the
#
two of them will discuss their book for three or four hours and it would have been an incredible
#
opportunity and an honor to to kind of listen in be a fly on the wall but i had promised a bunch of
#
my writing students that i will meet them this evening so i will honor that commitment and expect
#
them to be as entertaining and insightful so the pressure is on you there we go so let's continue
#
you know let's again like a skilled filmmaker like the christopher nolan of podcast let's again shift
#
back in time dramatically to your time in the ministry of personnel in delhi or at any point
#
that you wish to take up in that period but what i'm really interested in and what i think listeners
#
would also be interested in is that what is the texture of your day when you're a secretary joint
#
secretary whatever when you're an is officer in a department like that like how does a ministry
#
actually function like from the outside in the popular imagination there is a minister
#
and there might be one or two bureaucrats in the shadows behind that but actually it is you know
#
a much deeper ecosystem and so on and so forth so give me a sense of what that ecosystem is like
#
what is your role in it how fast things move like we are of course taught about parkinson's law see
#
northcote parkinson wrote this great book where he spoke about the incentives of bureaucrats as
#
always to increase their budgets and to you know increase the scope of their power and all of that
#
so we have all these stereotypes and many of them are partly true of course about what a government
#
department looks like we've all seen yes minister yes prime minister so give me a real gritty sense
#
of what it actually is in a day-to-day sense and you know how you grew to navigate your role in it
#
and understand how decision making happens yeah thanks i'll try and do that amit i worked in
#
government of india in four different levels it's typically what most of us in the civil service go
#
through round one at what is approximately the deputy secretary director level in my case almost
#
that entire tenure was as a private secretary to the minister of state for personnel and this is
#
something which a lot of civil servants go through it's a smaller number because the
#
number of ministers is is fixed and ministers typically have only one private secretary
#
if they have more than one portfolio for a while they'll have two so it's a smaller number that
#
works as a private secretary and there was a time when the old style let's say ics officers or the
#
early ias batches would look down upon this job of private secretary to minister it is almost like
#
you know you are a pa you're fixing time you know you're probably managing her or his time
#
and they wouldn't think much of it which i think clearly not the case so round one was
#
his private secretary to the minister of personnel round two at the joint secretary level 2005 to
#
2010 i was in the ministry of finance and joint secretary typically is a very very critical level
#
in the government of india and to quote one of my former bosses dr bimal jalan he i i'll probably
#
quote him more than once on the show because he's he's seriously one of my mentors and gurus
#
he i recall somebody would come to see him and he was at that time i think the governor of the
#
reserve bank of india and this external person wanted jalan sahab's advice that i have this
#
matter pending in government of india and a legitimate you know some foreign indirect
#
investment policy or some such issue and i need to go and pursue it in government of india do
#
you have any advice can you connect me to the secretary jalan sahab told him do you want the
#
matter solved or do you want to meet the secretary so he said no i want the matter resolved he said
#
in which case go and meet the joint secretary i'll pick up the phone and speak to this joint
#
secretary and as he famously said the last level at which a file is read in depth in government of
#
india is the joint secretary level the js is the person who is the right level of authority but
#
with the span of control which is manageable so he or she will get into serious depths of the subject
#
that he or she is in charge of secretary will typically have a portfolio which is four x five
#
x the js's portfolio because an average secretary will have five or six joint secretaries reporting
#
to him and by definition the secretary can't go into in-depth and and the times that i'm talking
#
about there's also a fair amount of delegation to join secretaries very few operational matters
#
went above me i could take decisions on a whole bunch of operational matters typically
#
policy issues legislative issues or issues that you considered were politically or otherwise
#
sensitive only those tended to go up and very often some of them would not go up formally on
#
file you would go across and have a chat with your secretary or with your minister saying that it's a
#
subject matter that i can deal with it's delegated to me but this may have an implication beyond my
#
desk it may have an implication beyond my department so do you have suggestions partly
#
deferring to their own experience and wisdom but a lot of work gets done at the level of js
#
that was my second stint third stint was partly in the ministry of finance in the department of
#
economic affairs itself as an additional secretary i was director general of currency and coinage
#
and what is called ex officio additional secretary and i moved as an additional secretary into
#
another department which is called the department of land resource and that experience is fundamentally
#
different because land is essentially a list to subject in the indian constitution meaning
#
it's a subject that is actually dealt with by the state so a union ministry on a subject which
#
is entirely dealt with by the state is in a sense an oxymoron but there are many such ministries in
#
delhi in the government of india that was my first experience of the additional secretary
#
and as additional secretary in a ministry which dealt with a state subject and my last stint in
#
delhi was as secretary in the ministry of skill development and entrepreneurship and that's also
#
very different because this is the apex and a secretary to government in government of india
#
is actually a very powerful entity and when i use the word powerful i am talking about the power in
#
that domain i'm not talking about power as you know sort of understood in a raw sense of transferring
#
people or stuff like that i'm talking about the power to influence agenda the power to get things
#
done interestingly this was a list three subject namely a concurrent list subject where the union
#
of india and the states both have jurisdiction and the constitution has mechanisms of how do
#
you resolve conflicts because if both have jurisdiction and both act and if they are in
#
conflict only one will prevail so in that sense i had an excellent sort of very full-rounded
#
experience starting with personnel which is entirely internally focused the rest of the world
#
isn't at all excited about how does government of india do its internal postings and transfer
#
how does government of india decide to fix the pay of x or y who is joining government of india
#
these are stuff you know that excite government servants beyond their families probably no one
#
else cares about them but this is the bread and butter of government very quickly the first
#
experience as a private secretary to the minister of personnel was a great learning in as much as
#
mr narasimha rao was our cabinet minister and these were very exciting times in india 91 to 96
#
is history will record probably one of those seriously transformative periods
#
i was not in a department which was doing any of the economic reforms in fact i was far away
#
even intellectually at that time from this notion of economics notion of economic reforms
#
but personnel you'll remember follows functions so in a very indirect way one got to see
#
what is happening in the ministry of finance what is happening in the ministry of civil
#
aviation what's happening in the department of industrial policy and promotion which is
#
repealing the entire license raj the permit raj so it was a great window not from the inside
#
of a reforming department but sitting outside within the government but being a part of the
#
council of ministers one got a flavor of things because the cabinet notes the council of minister
#
notes would come so very interesting learning some of which i alluded to in my previous sort
#
of reference when we spoke about how narasimha rao sahab handled parliament questions so the
#
learnings in personnel were hugely personally useful because one got to understand how does one
#
navigate oneself for the future in this you know zoo called government of india which has its own
#
protocol you know all of us have joined the service for our career so you know one wants to
#
legitimately quote unquote be ambitious and one legitimate ambition of almost every civil servant
#
is this golden parachute called a world bank job or a un job and end of my personnel tenure
#
i was lucky enough to land as executive assistant to dr bimal jalan who was our
#
director in the world bank this is 94 to 97 bulk of the period dr jalan was the executive director
#
i landed as his executive assistant besides the you know exceptional levels of pay and perks and
#
the you know ability to sort of be in washington and the exposure the experience of working with
#
dr jalan at close quarters it's a small office the world bank executive director's office is
#
the executive director dr jalan and two officers with him full stop now it's a bigger office it's
#
four officers and like grade inflation in universities there is rank inflation in the
#
government of india i went to this job when i was not even a director i went in 1994 which is the
#
you know 11th 12th year of my service now the people who go there are in their 22nd 23rd year
#
so young still learning landing in a job where i had no prior experience of an economic ministry
#
in government of india i was lucky enough to land there and i recall the words of my then
#
secretary personnel a very wise gentleman called nr ranganathan he was a marestra carder officer
#
so i'd gone to take leave of him saying sir i'm leaving next week and he said yeah i recall your
#
postings came where are you headed are you going to the world bank or the imf i said i'm going to
#
the world bank and i said i'll be he said you will be working with i said dr jalan he said yeah
#
an outstanding ias officer so i corrected him i said sir dr jalan is an economist he is a
#
lateral entry into government he didn't you know he wasn't part of the ias mr ranganathan said
#
krishnan i was joined secretary banking and dr jalan was my secretary so i know what i'm
#
talking about i got a little irritated because i know for a fact that jalan is an economist so
#
i repeated he said yeah he's formally an economist but let me assure you he is the best ias officer
#
that you will ever get to work with and mr ranganathan couldn't have been truer
#
and and i think this is one strength that i miss when we see the later day
#
lateral entries in government of india dr jalan is a trained economist spent a lot of his time
#
in the world bank and other institutions he was a regular staff there came back to india was an
#
icici chief economist to icici when it was still a financing institution for projects it was not
#
yet a bank and from that point he sort of that point he jumped into government of india came
#
into what was then called the ministry of industry and foreign trade and grew up in the system
#
and i realized later when i saw dr jalan at work what mr ranganathan meant an economist
#
great economist exceptional domain knowledge but even greater mastery on how the government of
#
india worked how the public system worked than most insiders so this ability to translate your
#
terrific domain knowledge into a cabinet note a decision in government of india because in case
#
you want to do reform and let's say you want to reform something in banking you need to understand
#
that there is a banking regulation act and there is xyz legislation and there are allocations of
#
business within government some subjects fall within banking some subjects fall within some
#
other department so to be able to do good you have to be solid on the bureaucratic nitty-gritty
#
within the system and that is something which i was privy to i i saw dr jalan working
#
he wasn't inside the government then but we got a very good glimpse of
#
how he navigated the system when he wanted outcomes so world bank was 94 to 97
#
i returned to government of karnataka and after a short stint in the ministry of or what's formally
#
called the department of finance and government of india i took a sabbatical i wrote the cat at
#
the ripe old age of 40 plus went back to im bangalore with the undergrad sense steven's
#
economics badge exactly 20 years my junior and that was fun i finished uh you know the mba and
#
stayed on and did my what is called the fpm fellow program in management which is equivalent to a
#
phd and then after an interesting stint in the urban development sector in karnataka and we
#
spoke briefly about privatization of water supply and private sector participation not
#
privatization really i landed in government of india as joint secretary in the department
#
of economic affairs which is 2005 to 10 and 2005 to 10 joint secretary bulk of the time 99 percent
#
of the time was as js capital markets which is in my opinion one of the finest jobs that any
#
governments can offer a terrific combination of operational issues a whole bunch of crises
#
and therefore you figure out how do you solve these immediate crises type problems necessarily
#
involving a regulator who's outside of the government a lot of legislative issues so
#
very good use of my knowledge of law but legislative issues on subjects that are
#
financial sector economics so a great combination of economics and law and a very very professional
#
hierarchy that i worked with to start with mr ashok jha of andhra pradesh carder who was my
#
secretary he was succeeded by dr suba rao who you will recall thereafter went on to become the
#
governor of the reserve bank of india uh dr suba rao was succeeded by mr ashok chawla who again
#
is a legendary civil servant from gujarat who went on to become chairman of the competition
#
commission of india chairman of national stock exchange by the time i completed my tenure
#
mr chawla was still the secretary of the ministry the five-year stint in ministry of finance was
#
exceptional we handled for instance a lot of the fallout of the leman crisis
#
the governor suba rao had just taken over he was less than two weeks old and mr bhave had taken
#
over a little earlier he was chairman of sebi and the fun part of the joint secretary tenure if i
#
can sort of put it in a slightly macro uh term uh was this is an india which for the first time
#
was facing the implications of being an open economy we had liberalized in the early 90s
#
and we had had a mild sort of experience of this during the asian crisis 97 to 99 but this full
#
blown global crisis brought home one very simple truth which is globalization by definition is a
#
double edged sword it has enormous benefits equally if you are interconnected problems of
#
the world will also spill over into your jurisdiction and it's not a politically easy
#
thing to handle you are handling consequences of something that you didn't create and you have no
#
control over so how do you handle it politically how do you handle it in a regulatory sense how
#
do you handle it in a sort of technical sense within your government and it necessarily involves
#
multiple players who are not part of your hierarchy they are autonomous independent
#
agencies like the sebi and the rbi great learning and and i think we came out reasonably well
#
i sort of also alluded to earlier in my reference when i was talking about mr pranam mukherjee
#
the financial sector legislative reforms commission announcement that we got in the 2010 budget
#
which i think in terms of the impact it will have on the nation epoch making it's it's something
#
which will play out in 15 20 years these kinds of reforms don't happen in five years but i think
#
rather than making it a monologue i'll stop here in case you have questions i'll answer those and
#
then go into the balance of the tenure no and before even going into the balance of the tenure
#
i want to double click pretty hard on this period in the finance ministry how you dealt with the
#
2008 crisis and all of that but even before that some general questions like you pointed out how
#
dr jalan was so good at not just being the economist that he was but also in being able
#
to become a good is officer which involved like a multitude of things and i want to talk about
#
those because just from my layman's perspective it seems that there are you know if i were to
#
break up the different challenges it's actually not one job it's a bunch of jobs combined one is
#
of course that in whatever department you are you have to have some kind of domain understanding
#
even if you're not a specialist like dr jalan you have to have some understanding of that particular
#
domain which can you know become challenging for an is officer at some level because as we discussed
#
earlier you know there is a danger that you're generalist so you have to figure out how to adapt
#
to each ministry you are and how deep to dig so one is domain knowledge two is adjust management
#
bureaucratic management and there also it strikes me that there are two areas and one is sort of the
#
bureaucratic nitty-gritties as you refer to it where if you are in one department but the implications
#
of your work spans across departments and you need the help of others to get something done
#
you are coordinating with your peers and other departments and i guess the second aspect would
#
be just management that you are managing people and i find that in any profession this is a
#
challenge that at first you are doing something you are a doer then you are a manager of a small
#
team then you are a manager of a large team and all of these are actually really different skills
#
right and the final skill also is at some level political management you are in a ministry there
#
is a minister you know you have to figure out the political implications of what you're doing
#
you have to figure out how to sell it and couch it in a political sense so it seems to me that the
#
you know that an is officer is not doing one thing they are doing a bunch of all of these
#
separate things and often they have to learn on the fly so give me a little bit of the sense of
#
this like you referred to you know government as a zoo and you said you have to figure out how to
#
navigate this so tell me a little bit more about the zoo like how many people are you working with
#
you know and you're also working with outsiders and we'll touch on this later but you've also
#
played a part in you know nurturing outside institutions like nip fp nig idr so you know
#
how does one look at this and is it therefore fraught with dangers what are the kind of stumbles
#
that you encountered what did you learn from them so you know i'm being a little incoherent but
#
i just wanted a sense of you know what that is like the whole thing yeah let me make an attempt
#
at answering this again we briefly alluded to this when we discussed the structure of the ias
#
and and i use the word ias somewhat loosely and when i talking about the ias i'm talking about
#
the civil service i am most confident talking about the ias because i know this from the inside
#
but mutatis mutandis this applies to the income tax this applies to the audits and accounts to
#
the railway traffic service to a higher or a lesser degree you start off as field officers
#
where you are you know the tasks are very narrow very clearly defined and you're transactional
#
you're not doing serious policy but you through that period understand grand policies big
#
legislations how do they play out in the ground and in retrospect i have now the name for
#
what you know i saw in keelkar and sha there is a chapter called unintended consequences of public
#
policy so i think one of the biggest purposes of this field job is for you to understand there is
#
a legislation which says xyz in reality xyz plus abc plus pqr and sometimes x may not happen at
#
all so there is this letter of law and there is the spirit of the policy what is the ground reality
#
so you get a good sense of that if you are observant if you are watching very often you
#
don't have the power to change it but you have the power to make notes you know that this is how
#
old age pensions are actually getting disbursed the government thinks i am distributing 150 bucks
#
per month to an elderly person but in reality this is what happens and you've made notes
#
the system allows you to give feedback so in your monthly meetings in your quarterly meetings you
#
are responding to your hierarchy they have made notes they will come to the conclusion some of
#
these need to be corrected some of these need not be corrected some of these cannot be corrected
#
and you then climb up you become additional head of the department in the state where you are
#
still transactional but your scale is the state and you have some levers for changing process
#
for instance if you are let's say i'm making up this hierarchy director in charge of
#
social security pensions of a state the lessons you've learnt as a subdivisional officer on old
#
age pension should inform you in terms of can i make this change in process does the person
#
have to come in person to collect it and we are talking about a time when we didn't have aadhar
#
when we didn't have electronic banking so it is still physical cash distribution with all its
#
pluses and minuses but you could do process change should there be an annual verification of
#
age or status of the person living non-living you may not be able to change the 150 into 250
#
because that's still above your pay grade but you get a higher responsibility of the same set of
#
transactions that you dealt with if you stick to the state you then become a secretary to government
#
where you have even greater elbow room now you may conclude old age pension is not serving a purpose
#
it should be more narrowly defined it should be regardless of age persons with disabilities
#
or persons with xyz needs so you have greater control over policy and if it requires a
#
legislation you also have the ability to now start writing legislation in that sense the
#
growth of your sort of responsibilities in government prepare you for what you need to
#
do so when you are a joint secretary in the government of india remember you are a joint
#
secretary after a rigorous process has concluded that you are to use the jargon empaneled
#
as fit to be a joint secretary in the government of india and that typically involves
#
assessing attributes of this is a secretariat position this is not a field position so you're
#
not running a scheme you are not operationally responsible for day-to-day stuff you are now
#
writing those legislations contributing to those legislations deciding should india
#
move to an electronic depository or not you're not deciding but you're pretty much deciding
#
in terms of the framework and what you put down substantially is what will get will move up
#
so you are in a policy position contributing to national level policy and your previous jobs
#
have prepared you for this but not everybody necessarily is inclined or capable of doing all
#
this so the system in its original design had a very rigorous filtering process typically just
#
about 40 to 50 percent of the batch got empaneled as joint secretary now does that mean that the
#
balance are not capable the answer is yes and no they are not capable of being joint secretaries
#
some of them may be excellent mds of let's say the fertilizer corporation where you're not doing
#
you're ensuring that a fertilizer plant works optimally produces outcome so it's an operational
#
job so the whole hierarchy planning was there is a set of people who are likely to be interested
#
in this kind of more research policy type work there will be a bunch of people who are far more
#
hands-on who will run things and there are positions which are a mix of the two and there
#
are a smaller number of people who are capable of doing both and switching from one role to the
#
other so when you land as a joint secretary in delhi in a sense the system has concluded that
#
you're capable by and large the since this is largely peer group based assessment as a matter
#
of my personal experience 99 percent of the system you know 99 percent of the time
#
the system gets it right a bulk of us who get empaneled are indeed capable of being joint
#
secretaries and you've also been prepared does that mean that you hit the ground running yes
#
you have the ability to hit the ground running but i had no prior experience of securities market
#
i had no prior experience of the cibi act it's a steep learning curve so i could have ended up
#
as js air in the ministry of defense and i know nothing about air force i know nothing about
#
aircraft but my colleagues who were ma in history not science students we remarkably successful
#
joint secretaries in charge of the indian air force they don't need to know air force as in
#
the technical side but they need to know a lot of the domain that will come to the ministry of
#
defense and you have to sit on your back side read talk to people who know the subject there
#
is an enormous amount of material plus as a sitting joint secretary you get access you get access to
#
all the previous files you get access to people and if you want to talk to people people are more
#
than willing to talk to you so if you are willing to put the effort then that domain thing that you
#
spoke about you learn that reasonably quickly and you continuously learn your fifth year of
#
joint secretary air you will still be learning because there will be something new that you will
#
learn unlike the case of dr jalan in our case a bulk of us who come from the system we know the
#
nitty-gritty already because we've done that you've done that in the state you've probably
#
done that earlier in your stint as deputy secretary in the government so you are reasonably
#
familiar with nitty-gritty there will be some specific nitty-gritty of that job which you will
#
learn in no time and you learn the domain while you are there and i think it helps this is my
#
personal view the ias is a generalist service but there have been these periodic attempts at
#
can we group you into broad sectors for instance there was a conscious attempt in the early 50s
#
to create something called the imp the industrial management pool the idea was
#
it was those days we had licenses we had permits you had you know monopoly restrictions so those
#
required a very detailed understanding of the legislations under which permits were issued
#
what are the bases considerations on which you issue licenses therefore a bunch of people who
#
had worked this should continue to be in that pool was the idea and this idea is you know
#
periodically it resurfaces and it gets into a lot of difficulty because there is a view that
#
the early entrant into this pool is trying it's that railway compartment syndrome i have gotten
#
to the department of economic affairs as a deputy secretary i will now argue this is a very
#
specialized task only those who've done deputy secretary directorships in dea should come as
#
joint secretary partly out of self-interest i'm making a case for myself to continue in this
#
department because i think this is glamorous the other guy can turn around and say if it is so
#
specialized you shouldn't have been there in the first place this job should be with the indian
#
economic service who are trained specialists and i think there is some truth unfortunately
#
it's it's one of those it's not an either or situation i think there is a case for broad
#
areas of specialization but i don't think there is a watertight case for saying once you are in dea
#
only you should continue to be in the department of economic affairs or in civil aviation because
#
even today a lot of what the secretary does is a lot more of what you called the managerial job
#
it's like the chief executive officer of a very niche area let's say drugs and pharmaceuticals
#
or a consumer products company you could have an hr person you could have a finance person you
#
could have a marketing person you could have a strategy person heading that organization
#
he or she brings when he comes or when she comes a ceo a particular domain knowledge
#
but the knowledge or the capability that she or he brings is this broad managerial i may not know
#
every nuance of civil aviation but i know how to manage six joint secretaries one financial advisor
#
and make sense out of the chaos that goes on and be able to translate this meaningfully to the
#
minister and convert this into policy and legislation so i think there is something to
#
be said in favor of a middle path which is a combination of some broad degree of specialization
#
but not so minute that you get fixed into a pigeonhole i think it seems to me that
#
you know it's sort of therefore unfair to refer to is officers as generalists one could say they
#
are specialists in learning that you know you have to figure out ways and heuristics to actually
#
you know learn whatever domain you have to become good at whether it is by you know talking to
#
experts and so on and and even there it's a little bit of a trap isn't it because talking to experts
#
and opening yourself up to learning also implies a certain amount of humility and is officers have
#
a lot of power so you know does this kind of become an issue like the good is officer would
#
just always keep himself open because you want to maximize learning and efficiency
#
but it is equally possible to get carried away by the power and perks of the job and
#
not quite do that it happens very often and i think that's a real problem there are a lot of
#
our colleagues who and it's one of the favorite sort of quotes of a director in masuri academy
#
that a lot of you think that you've finished learning when you come here tragically your
#
learning begins now what you've got is an entry and a license to sort of occupy these jobs but
#
your serious learning begins now i would think just about 50 percent in my opinion are in that
#
bracket you know in that category which is you need to be lifelong in a learning mode
#
and the other attributes you know one is the learning mode the other attribute which is
#
you fundamentally have to be a good transparent open human being you need to be considerate and
#
and you know times like covid have taught us and and i recall those quotes that you know you see a
#
person you don't simply know what he or she is going through so i think empathy all of those
#
standard qualities of a good leader in terms of just being a good human being a good hr person
#
i wish the percentage was higher but i think it's just about 50 i'm talking about a combination of
#
these willingness to learn the humility to admit that these are domains where i will never be on
#
top of things but the guy with the knowledge of this is just a phone call away and when i need to
#
i will get to the bottom of what i need to learn and with him or her we shall make progress this
#
is just about 50 of the system and i think it's a percentage which is declining i mean 50 of the
#
system actually seems like a decent number to me because in many professions i would say that
#
90 of people are just going through the motions and not really learning and not really growing in
#
that sense or growing perhaps in terms of the limited game that they have to play to get ahead
#
within their corporation but not otherwise my next question is about intellectual direction and purpose
#
like earlier you used the phrase that when you said you were in the ministry of personnel
#
you even though you were surrounded by that environment of reform you said you were quote
#
unquote far away intellectually at that time and you gradually got closer and i'm curious about
#
examining that that where were you intellectually and i understand that the default mode of government
#
could often be to look at the state as the solution to everything and etc etc and perhaps go overboard
#
on that so where were you intellectually how was it that change came about was it interacting with
#
all these people was it actually seeing the dramatic effects that policies towards opening
#
up the economy could have on the people and to go ahead from there at what point does this
#
intellectual change then transform into a sense of purpose like i imagine in the early in your
#
early years as an is officer the sense of purpose is pretty limited as a field officer you're just
#
carrying out whatever you're doing that's your sense of purpose it might expand a little bit
#
but when i think of the sort of the reformers of your generation and older you know people like
#
elkar and sha both of them for example what i notice is that there is not just great intellectual
#
clarity there's also this great sense of purpose that there is a mission here to do something for
#
the country and we will be strategic and tactical about it and do what we can so tell me a bit about
#
this process both of intellectual growth and getting to that point and then that translating
#
into purpose so when i said i was intellectually far away what i meant was the department of
#
personnel had a very well defined clear mandate and that mandate was far far away from the reforms
#
that were happening you know reforms were happening in ministries that were handling the economy
#
we were handling people inside government so in that sense one was intellectually away but
#
it was an infectious time you know 91 to 96 if you were in delhi and in the government you can't be
#
or you couldn't be away from the transformative things that were happening all around you
#
so one was watching a lot of this with a great deal of curiosity your friends and your colleagues
#
were deputy secretaries in the department of economic affairs and industries and textiles so
#
you are getting a sense of what is going on more important having grown up in socialist india and
#
having gone at 4 45 5 am and having stood outside the dms booths and done fistfights to get that
#
one and a half bottle of what used to be called toned milk t o n e d i don't know if you remember
#
there used to be degrees of fat so there was a double toned milk and a toned milk and you have
#
to fight to get with your you know the card that you carried it said four bottles because your
#
household had eight people or six people and that tukandar would say no we have got lesser supply
#
you have no means of verifying having seen that socialist india one also experienced what was
#
already beginning to happen cassettes chocolates i'm not a smoker but foreign cigarettes these were
#
beginning to become visible and from a socialist india in front of your eyes there is the beginnings
#
of a more prosperous india you may not have had the money to buy all of this but the very fact
#
these are available was already visible so one experienced it the serious intellectual shift
#
is during the world bank days 94 to 97 you as you know advisor to the executive director
#
the world bank board is interestingly it's called the executive board it has 24 directors
#
all of whom are resident full-time directors of the board so there are 24 executive directors
#
who meet twice a week on Tuesdays and Thursdays and these are almost day long or nearly day long
#
meetings where the board is approving individual operations as well as policies so this morning
#
is albania infrastructure the afternoon is romania telecom a day after tomorrow is
#
bangladesh padmavati bridge project so the exposure that you get sitting as advisor to the ed
#
is absolutely global the finest economists on earth are the ones who are coming and briefing you
#
and if you are willing open and ready to read and converse with them you got a whiff of
#
what was happening in the rest of the world and you also got to read about what had happened to
#
india and the comparisons like in 1960s south korea and china were a little behind india and
#
and see what happened thereafter so a lot of the serious intellectual bombardment was during those
#
three years and one also got to travel a lot as part of the the bank and the executive directors
#
get to travel one got to see with one's own eyes what these changes and and and a lot of the world
#
was going through this it wasn't only india one got to read a lot about southeast asia and this
#
is this famous wdr that came out world development report on the southeast miracle on how markets
#
had transformed all of southeast asia so the serious intellectual shift was 94 to 97 when one
#
sort of read a lot of what was happening around 97 there was a possibility you know and and dr
#
jalan was a big name in the bank having been earlier a staff a lot of the senior people were
#
his colleagues and most of my friends who had fellow sort of civil servants were landed as
#
advisors in the bank and the fund almost all of them stayed on no one came back and you know their
#
eds were powerful enough to get them into jobs and i remember dr jalan checking with me and i was
#
very clear a for a variety of personal reasons we were clear that we wanted to come back to india
#
and the whole purpose of joining the ias and when this goes back to your question about public
#
purpose whole purpose of joining the ias and not having gone abroad when one could have after
#
undergrad or after law or gone into a private sector career was to do all this in public policy
#
so the 94 97 knowledge was a great foundation with which one could come back and not stay on
#
in the world bank because the world bank is only still advising people on how and what to do given
#
the ias culture the whole sort of spirit of ias is to do it i know that water supply will improve
#
with private sector participation it's fun writing about it but it's far more fun
#
doing it and ensuring that who really actually gets the water supply that it deserves so i think
#
the intellectual transformation and its application is almost entirely after the world bank stint so
#
let's continue down the chronological journey for that moment before we come to the finance ministry
#
and i'm also curious about then the shift to sort of doing an mba at im and then continuing
#
to do a phd and all of that and i'm i'm curious about where did this came from because you've
#
spoken about the world bank period as being something where intellectually you are sharper
#
but equally you become more determined to get out there and actually carry these things out
#
but obviously at the same time there is this desire to continue the learning process and
#
figure stuff out so tell me a bit about your thinking during this period like you've come
#
back to karnataka after the world bank and then you decide that hey i'm going to educate myself
#
further and so on so tell me a bit about that phase and yeah i will i need to step back a little
#
when i finished law uh you know 1979 82 my classmates uh i mentioned them earlier
#
dananjay chandrachud went to harvard for the llm paraktar party another close friend also
#
went to harvard for his llm dananjay stayed on and did an sjd many of my colleagues were going
#
abroad i also got admission into uh harvard for my llm at that time i didn't get funding
#
i managed to get a deferment a short deferment i tried getting study leave in my fourth year
#
of service and it was turned down and i remember my chief secretary then mr tr satish chandran
#
who's no more who told me a young man you need to make up your mind do you want to be an academic
#
do you want to be a researcher do you want to be an ias officer it's not easy to be all of these
#
so you having chosen the ias i suggest your early years are the years of learning in government
#
you shouldn't abandon this and go away because if you go away you won't come back here and in any
#
case he rejected my leave and the government of india also did not agree to let me go earlier
#
than you know the rules permit so i stayed on but this desire to study uh you know being good
#
students and and american universities are fascinating places the desire to study was
#
always very strong while i was at the bank my wife went to the graduate school in george mason
#
i was fabulous we used to drop her off and on pick her up and she'd come back and talk to us
#
about her classes and it only reinforced all that one had known about american universities
#
and one of our favorite occupations you know when we were in the u.s our kids were both
#
school-going little fellows we would drive to university towns so i remember spending a
#
fascinating day in princeton just drooling you know looking at those schools and wondering you
#
know when would we ever get an institute of advanced studies like princeton and and we've
#
probably driven to more university towns in the u.s and spent days on looking at universities
#
then we've been to beaches or forests and things like that so when we finished the choice was
#
could we have stayed on and i have done a phd our fear was if he stayed on for three more years
#
we wouldn't have come back uh you know when you're young and when your kids are young
#
the u.s and countries like that are very seductive so but we consciously decided we'll come back
#
i joined the department of finance working there was still keen because the world bank had whetted
#
my appetite but i didn't feel adequate in terms of my knowledge i had a superficial i felt
#
superficial understanding of markets of finance of infrastructure i felt i needed a more rigorous
#
sort of grounding and the government is an enormously generous employer it gives you
#
two years of fully paid study leave and it actually encourages you to do this and i thought
#
approximately middle of the career this is the time one can take off study and be able to come
#
back the entire purpose was not to study and vanish but to study and come back and i decided
#
to write the cat and was lucky enough to get in and it's it's an interesting episode that i want
#
to recall the current cm of karnataka mr sidramaya was my minister he was the finance minister i was
#
reporting to him and he was very keen that i should join as commissioner commercial taxes which
#
is a very prestigious post it's a very senior post i had been deputy commissioner in that
#
department earlier mr sidramaya thought very well of me i got along very well with him and he had
#
gone and spoken to the cm saying make this guy commissioner commercial taxes and here i am in
#
front of mr sidramaya saying sir i have come to take leave of you i have applied and he asked me
#
in canada are you not ias so i said yeah i am he looked at me and he was very angry he said 90
#
percent of india spends all its time studying to get into the ias it's a great opportunity to do
#
public good you are among the few who has got this opportunity you want to study so why do you
#
guys are you guys i mean you can't make up your mind is it if you are an ias officer you should
#
be working hard to improve people's lives you shouldn't be wasting your time writing a thesis
#
in any case it's your call and he sort of very angrily walked away notwithstanding his anger i
#
went away i went to im bangalore did my phd and it was on a topic of you know some contemporary
#
relevance which is financing of urban infrastructure through the markets and there is an inherent
#
tension urban infrastructure typically will either be built or under the control of elected
#
municipalities elected municipalities will ordinarily be populist but if you bring in
#
private sector participation you need to realize monies with which you service the debt you pay
#
for operations so in a populist elected local government can you do commercial infrastructure
#
for urban areas this was the area of my study i thoroughly enjoyed my study but more interesting
#
is the chief secretary who gave me study leave when he retired his wife became the chief secretary
#
she called me one day and said i believe civil servants are here to work i am recalling you
#
with the condition that i'll put you in the department which is in charge of exactly the
#
topic on which you are writing a dissertation so rather than write a dissertation or in addition
#
to writing a dissertation come and do it so come and do municipal infrastructure because it's easy
#
to write about municipal infrastructure come sit in the hot engine room and do municipal
#
infrastructure so one is very lucky very kind chief secretaries so then i spent the next three
#
and a half years doing exactly what i studied which is municipalities infrastructure i was
#
first secretary urban development and then i was md of the karnataka urban infrastructure development
#
and finance corporation so it's almost like my phd title is the title of the corporation that
#
i headed so managed to do a lot of interesting work not always very successful real life is
#
far more complex than dissertations are but great learning and and that became a nice foundation
#
to jump into capital markets in the union of india which is the mechanism with which
#
you finance not only infrastructure but finance the various growth needs of the economy
#
so tell me a bit about that stint like ajay told me this entertaining story about how i think
#
october 2005 or something you landed up at his office in the ministry of finance and you said
#
ajay i have come here to work and ajay said this is my last day and you kind of came in as he went
#
out and in fact the nps and we've had an episode on the pension schemes and the nps was sort of
#
the baby that he was working on with such passion and he goes out and you immediately take over and
#
kind of continue that story forward but tell me a bit about your early days there or what was it
#
like you know sort of getting used to it what was the learning curve like what was the sort of
#
environment like like one of the sort of the delightful parts of the whole narrative of how
#
reforms happened and i find it so heartening and so missing in present times is how there was this
#
uh continuity between political regimes and governments where you could work on the same
#
policy across different governments like indeed the nps that you know the watch by government
#
could continue down the path of reform as the earlier governments read and then the manmohan
#
government after that could you know take that further and that chain of course ended at a period
#
of time but so i'm imagining sort of this golden period where you have all these people within
#
policy who are all working in the same direction broadly aligned and so on and so forth is there
#
something to that or it was government still a broadly ossified machinery and we had the good
#
fortune of having a few good men as it were and a few good men and women as we should say who were
#
you know working to take things forward within the system it's correct you know the day i i
#
actually reported sometime in august september and i moved i joined in what is called the bilateral
#
cooperation division and very soon the capital markets division became vacant my predecessor
#
mr uk sina moved to the uti company which is now a mutual fund so i took over from him
#
and it's exactly that time that uh ajay was leaving i didn't know ajay very well then we
#
knew each other we had met in conferences and is actually keenly looking forward to having a
#
colleague who intellectually you know very rigorously knows all of this and he said what you
#
just now said he said saying no i'm off but i'm only you know a shout away i'll be in ig idr
#
but i also have some responsibilities in the nip fp we'll figure out how you know sort of we keep
#
up this collaboration and taking for instance the you know the nps example it's a great example
#
where there is enormous continuity regardless of change of regimes i am not entirely sure that i
#
agree with you that there is a break in that my sense is there is probably a temporary pause
#
because i think this regime in one sense is on to a reevaluation of everything and i don't deny
#
you know they they have a viewpoint and the viewpoint is there is perhaps some elite capture
#
of a lot of policies in india this argument that markets are great
#
probably needs to be looked at afresh markets are great for those who are well
#
endowed and who are participants in the market but if half of india is not a participant in this
#
market markets will thrive market participants will thrive but those who are outside the market
#
will continue to be where they are and i think this evaluation in my personal opinion is called
#
for the answer thereafter should be there is clear evidence that markets work and prosperity sooner
#
later sort of comes to all the participants how do we make sure that everybody is able to participate
#
in the market it can't be that markets work only for a few people and therefore i will
#
abolish it i don't think we have reached a conclusion there i think slowly this is my sense
#
i can't necessarily back it with a lot of evidence i can perhaps give you some examples i think
#
there is now slowly we are reverting to the mean namely i will politically make
#
noise that i am different but on fundamentals i will quietly continue on many of the things
#
that have worked well in the past that's my sense but that was a digression let's go back to nps
#
nps was a near continuous you know mid 90s reports converted into legislation
#
by mr vajpayee the legislation doesn't go through because you know there's a change of government
#
and there's a lot of negotiations i was very much a part of these very interesting negotiations
#
that the government of india had i remember meetings attended you know with i as joint
#
secretary servicing meetings where the then minister mr charambaram had extensive discussions
#
with madame sushma swaraj these were fascinating meetings and she honestly explaining that these
#
are issues with which we have no quarrel but sorry for xyz political reasons there are elections
#
around here elections around there this is not something we can support you at this stage but i
#
offer you this compromise do this administratively don't bring in a legislation we think it's a good
#
idea but if you bring it out politically into a vote we will be forced to take a position don't
#
force us to do that let's wait for a better time and can we write these extra safeguards
#
likewise mr buddhadev batacharya then cm of bengal accompanied by mr nirupam shen who was the
#
minister for industries and a sharp finance person who understood all of the mathematics
#
sitting across the table with mr chidambaram and i was in attendance saying our difficulty is
#
as a government which is paying through its nose beyond what it can afford for the you know the
#
defined benefits pensions we are all for defined contribution pension but hello this will not be
#
decided by us this will be decided by i think it's called in kerala it's called the aka gopal and
#
center i i recall mr batacharya naming that building ajay bose bhawan or something which is
#
the headquarters of the cpm so he put it very nicely he said this will not be decided in writers
#
building this will be decided in so and so building so convincing me is not enough you have to
#
convince mr karat you have to convince x y z and but the spirit was please convince them we as
#
government people are completely with you but we have to carry our party and this is democracy
#
and till then we will publicly oppose you so kerala trippura and bengal continuously opposed
#
it and then we had a meeting where you know the prime minister dr manmohan saying mr aka anthony
#
and defense minister mr pranam ukharji mr chidambaram and a whole lot of chief ministers
#
in vigyan bahun attended and quietly agreed don't bring a legislation if you bring a legislation
#
all of us will have to take hard positions we will look the other way you carry on what
#
you're doing at least for government servants because you don't require a legislation for
#
government servants government servants pensions are contained in rules so please carry on and
#
we will allow you these limited reforms all going well one year's you know what two years
#
one year later if the political climate is better we will try for a legislation later
#
the legislation finally came in 2014 but the continuity and the near unanimity at least in
#
closed doors of most political parties was a fascinating insight into how this polity works
#
my senses sooner or later you know when a lot of the sort of the hard positions are you know become
#
softer we will get back to that mahol where we will agree that these are solvable legislatively
#
these are not solvable legislatively so it was a great experience great learning your specific
#
question was how does one sort of navigate the politics of reform is that partly also the
#
politics of reform but i'm also sort of interested along with that in learning about sort of the
#
community of reforms reformers the community of reformers that was kind of building up that
#
you were part of which included bureaucrats within the government which included economists
#
outside the government and so on and so forth excellent i'm glad i you know asked you this
#
question i was planning to come to it and sort of briefly got lost 2005 6 the world was awash with
#
money you know in retrospect we know low interest rates easy low interest rates money was getting
#
created all over the west and it didn't have outlets it was flooding all emerging markets
#
india was struggling with this open economy macroeconomics problem a problem of plenty
#
it's not a problem that we were familiar with and that has serious implications for the domestic
#
economy it requires capabilities it requires policies of a kind that we had not been used to
#
the government appointed a committee called the ashok lahiri committee to sort of go into this
#
ashok lahiri committee went into it and made a lot of good recommendations one interesting
#
recommendation it made was government does not know this adequately it doesn't have enough
#
knowledge one or two individuals here may know but on a continuing basis this knowledge is also
#
evolving it's not something which is you know you can go and get a textbook and start doing it
#
tomorrow because things are not what the textbooks said they would be so you need to continuously be
#
on top of this so it recommended that the government should figure out a way
#
of getting expertise from external institutions that report fell on my lap early on my stint
#
and then i went to dr lahiri he was chief economic advisor a very learned wise reform-oriented
#
gentleman and he said look my natural instinct is i before i came into this job i was director of
#
national institute of public finance and policy and it's a government of india ministry of finance
#
department of revenue grantinade institution it's easy to deal with there's no procurement there's
#
no tender gender we'll just go with them and we'll figure out there will be people inside there
#
otherwise they'll hire people with whom we should get into an mou so we used the lahiri
#
committee report started talking to nip fp govinda rao sahab he was the director exceptionally open
#
very policy oriented and i knew him from before he's also a man from karnataka we have some common
#
friends it is very easy to get through to him work with him and we got into this mou and it's a
#
fascinating mou because this was not a project this was a program you get a bunch of people
#
who will be studying issues which have both enormous academic relevance
#
contemporary academic relevance and they have significant policy relevance for india what do
#
you guys get out of this you potentially get publishable high quality academic papers but
#
you also get a window into policy making what do i get out of this i get from you cutting edge
#
current you know latest economics knowledge latest policy knowledge latest law knowledge
#
but not as an academic paper but as a policy note i have a problem let's say tomorrow morning
#
how should surplus cash of public sectors be deployed historically they have only been
#
deployed into fixed deposits but that's not a great way to manage treasury there are ways
#
in which you can manage it better it's a life problem we didn't refer this problem to nip fp
#
i'm just giving you an example so if i have an issue like this can i turn around to you will
#
you guys give me you know one day time four things you can do five things you can't do
#
regulations permit you to do this regulations don't permit you to do this in some case please
#
change the regulations these regulations have outlived their utility so it can't just be
#
pure theory translate into nitty-gritty of government it took effort on both sides
#
but it's a program that worked extremely well in addition to all these papers that got written
#
academic papers that got published policy papers that got written regulations the drafting of which
#
they helped with it also led to an interesting experiment i think a very successful one every
#
one or two months ajay and his team would organize a practitioner's round table so let's say we want
#
to discuss why is mutual fund penetration not happening in the manner it should because in a
#
new emerging market with low levels of financial literacy people who want to benefit from a booming
#
market should not go directly into equity that's something which requires a lot of research ability
#
study of a of a depth that ordinary folks in routine households are not capable of
#
historically this has been through the mutual fund route where you have institutional capability
#
people will read people will understand so when we wanted this thanks to the fact that it had the
#
ministry of finance backing and thanks to the fact that ajay knew and elah at that time and
#
susan and igadr knew these are the 10 serious guys that you need to speak to writer later
#
ministry of finance would like a conversation with you but we don't want a stiff government
#
mahol we'll hold it in nipfp so it's a semi-academic a less formal setting they will candidly talk to
#
you about look we are interested but this rule of government this income tax provision that
#
regulation of sebi is coming in the way maybe you need to modify this but we'd also have a
#
sebi person who will then explain the purpose of this regulation is this there is a consumer
#
protection angle so we can't dilute this okay retaining that what can be done these were
#
excellent conversations so over the you know three years four years that i i ran this program
#
we would probably have had conversations of this nature on every topic that was of relevance to us
#
multiple times and we also had smaller more focused conferences in neem rana where
#
sort of more broader macro exchange rate regime inflation targeting and the good part is a lot of
#
this actually got translated and became policy became law and the thing to note is these you
#
know this is a titanic the indian state to move it one inch requires an enormous amount of effort
#
and rightly so you have to convince people it's a democracy i can't decide india requires a unified
#
financial regulator i can argue the case there will be 50 fellows who will push back and there
#
will be a a compromise solution that will emerge and 2016 inflation targeting central bank finally
#
happened in india but without sounding very sort of immodest or bombastic let me tell you a lot of
#
the seeds of what became financial legislative policy in india so from 2008 to 1415 the seeds
#
were in these conversations in these programs in the notes that got written and in the fslrc that
#
resulted so that is the way in which we engaged with this community and it was indeed a community
#
of reformers there were external experts there were academics there were practitioners but all
#
like-minded in the end goal many of us had differences of opinion on the means the reserve
#
bank of india had very often exactly the opposite view for the same objective but extremely civil
#
good conversations i still recall mr padmanavan g padmanavan ed one of the best deputy governors
#
the rbi never had g padmanavan was my counterpart handling fema we would violently disagree on world
#
views but at the end of it both of us had the sense to sit down this is an immediate problem
#
we need a solution can we agree on this as a compromise yes and there have been times
#
i can reveal it now his boss had taken a rigid position my boss had taken a rigid position the
#
two of us would meet and they'd say krishnan let them fight these are the little fellows who
#
are getting squeezed on account of the disagreement between government of india and rbi can you and i
#
quietly carry out this change in circular if this change in circular is agreed to by you
#
it will solve the problems of 15 of these guys five of them will not get solved because those
#
require amendments let these guys agree on amendments for you and i can we solve these
#
15 problems and we'd solve them so the collaborative community of reformers was a reality
#
i am not currently familiar with this machinery because i am retired i am not very much a part of
#
this setup i hear that it is not as vibrant as it used to be partly because i think this government
#
is probably a little more suspicious of external experts but my current sense is that is slowly
#
breaking down they've been in power long enough now to know these are good institutions these
#
are good people we can collaborate with them and i think any external person one should be worried
#
about does that person have an agenda so i think once it's clear that there is no agenda the ability
#
to collaborate should improve my sense is it will improve but i'm not entirely privy to what is going
#
on i hear there we could have much more of this so over a period of and i'll again dive into 2008
#
later because i'm really fascinated about that period and how you navigated those storms but a
#
question about a sort of a narrative that has built up across various episodes i've done with
#
people like puja Mehra who wrote the lost decade and with Ajay and so on and so forth and i want
#
to ask you about these two parallel narratives of the political environment and the sort of
#
the economic reformers community and the political narrative is that from 91 to
#
circa 2011 perhaps you know those years you had this golden period where it didn't matter which
#
regime was in charge there was a tacit understanding on the kind of reforms that need to be carried out
#
and they were carried out and you had an army of not an army perhaps but at least a group of
#
reformers as you said you know widely spread out within the government outside the government
#
working together on this and then you have sort of the terrorist attacks in bombay
#
and mr chidambaram is shifted to the home ministry because it is felt that his services are required
#
more there pranam mukherjee takes over at finance where he remains for a while and is essentially
#
a disaster as a finance ministry is the overall narrative where his thinking harks back to the
#
socialist 70s you have all kinds of regrettable policy coming into play like the retrospective
#
taxation and so on and so forth and economic growth slows down circa 2011 onwards but at
#
some point it is realized that hey this is a problem we got to do something so he's kicked
#
upstairs to the presidency as it were mr chidambaram comes back and chidambaram in the
#
final years of upa2 is final months of upa2 is actually again on the right track doing good
#
stuff then mr jaitley takes over when modi wins the elections and mr jaitley is continuing
#
good work and there is some sense of that but the final great piece of legislation that they
#
really do is a bankruptcy code which came out of work that you guys did in a sense you are
#
almost a key person responsible for it and that happens but then a certain kind of populism takes
#
over and the populism diverts the political attention from the reforms that might be needed
#
and a lot of the populism is based on a shallow understanding of economics and you know like
#
demonetization comes out of that against all expert advice and the country kind of goes down
#
that route and at the same time there is a political hardening where parties can no longer
#
talk to each other as they once used to like these meetings you've described you know with
#
mr chidambaram and sushma swaraj ji and so on and so forth they can no longer happen they are
#
impossible and the opposition must now reflexively oppose anything the government says like the farm
#
laws and the government must reflexively start painting the opposition as anti-national
#
and that conversation goes to hell and that is one narrative and the other narrative which are
#
here as a lament is that this reformers community also kind of fizzles out and it essentially
#
doesn't exist anymore anywhere close to government itself so what is what is your sense of these two
#
let me take the second question first you know about the reforms community
#
looking back would i have done it differently you know i i didn't create the community that community
#
was existent i came into it in 2005 and sort of became a part of it was a beneficiary of those
#
conversations looking back would i have if i had an opportunity would i have done it handled it
#
differently i think i realize now we weren't inclusive enough there is a tendency i think in
#
all of these quote unquote uh you know self-created communities there is a selection bias i tend to
#
uh congregate and and mix around with people who broadly think like me who reflect my own views and
#
i'm not saying the reform suggestions themselves were one-sided but i think a lot of people
#
people and and they've told me this later many of them are good friends they didn't know me that
#
well but when i moved into say prime minister's economic advisory council out of the ministry of
#
finance i moved out of all all this into land resources and one would meet many of these
#
either think tank people or civil servants or academics one complaint was it was a very
#
exclusive club and i my defense was i reached out you know i reached out for instance a draft
#
report on mumbai as international financial center was put out on the website of the ministry of
#
finance and we invited comments and suggestions and let's say 20 suggestions came 16 of which came
#
from the people that i called for a meeting if no suggestion came from some of you
#
how do i reach out because we have limited bandwidths
#
i realize now notwithstanding this formal defense which is very correct
#
one should have made the effort to those who were not speaking and i think it's important
#
you know it's the sense of not only actually trying to be inclusive but people thinking
#
that you want to be inclusive some of them said look we knew this was a sham i mean you
#
were just putting it out for the record you were only interested in comments from you know some
#
four or five people who thought like you i don't think you are interested in comments from the
#
others i genuinely think i was but i think in life perception often is far more important than
#
reality so i would have done it differently in the sense of being if i had the time i would
#
have done far more equivalent of you know those town hall type meetings and some of it came home
#
to me in a very sort of indirect way when i went to varanasi in 2015-16 i was in the ministry of
#
rural development department of land resource i was on a private visit i have a close friend
#
there i'd gone for some family function of that gentleman happened to be principal of a very
#
well-known local college he said are people don't get to speak to additional secretaries
#
in government of india can you do a small talk on rural development programs he said yeah i'll be
#
happy to do a small talk the place was milling with people i didn't expect it close to a hundred
#
plus people undergrad mostly a few post-grad students and i started my presentation which
#
i had sort of worked on the previous night on the second slide kid puts up and says
#
a lot of these words are very technical
#
you know i'll translate into the
#
very few people he said
#
i tried and i could speak much better than you know i initially thought i would and it's you
#
know mixed like you're having conversations over a dining table post that one hour for almost one
#
and a half hours i must have been mobbed every kid had five questions some of them pertained
#
to the presentation i made but a lot of it presented you know related to life
#
the hunger for this kind of knowledge
#
the you know need for a conversation and subsequently i had occasion to do this
#
in many places and i've done it in coimbatore so when i talked about how would i have done
#
this differently i realized like a lot of us in the policy community i am very conscious of it now
#
we are very deli centric and to that extent i completely agree with the current regime
#
i think one of the important points of the current regime from day one i think we use you know this
#
khan market etc etc loosely i think that there was a a fine point that was being drawn
#
the consensus and and i'm quoting somebody very high in this government whom i will not name
#
when the person was told no no this is a consensus across india he clarified this was a consensus
#
across india international center this was not a consensus across india and constantly you guys
#
mistake india to be equivalent to india international center i am now very sympathetic to that viewpoint
#
viewpoint and i think the modern you know you spoke about modern technology and media i think
#
this enables it so i am now very conscious of the second point that reform community was i think
#
seen by a lot of people as elitist completely self-contained arrogant wouldn't talk to the
#
rest of us we may have had the same view as you but we haven't once so i think i will do it
#
differently i would have reached out to more people so that's my broad answer to question
#
number two and i think increasingly the government is doing it but i think we need to do it much more
#
substantially and government is just one part of it you know when we talk about think tanks we
#
typically talk about four five six institutions that immediately come to your and my mind
#
all of which are people like us in and around you know six kilometer radius of north south block but
#
i think the excellent institutions in kochi excellent institutions in bangalore and beyond
#
chennai and i think we need to go talk to more such people and to darbhanga to motihari maybe
#
enormous hunger and i think the modern media has clearly whetted their appetite they know all of
#
this is going on but they don't get to participate your first question was about the need for more
#
sort of and and just the political environment the hardening of stances and so on and so forth
#
that whole narrative that we had 20 great years but the last 10 years have been in like in puja's
#
words a lost decade so to say and at one level one can lament that and say oh we've gone to hell
#
things are going to get worse but at another level the sands are constantly shifting so i'd
#
like a sense from your perspective of you know whether you broadly agree with this narrative and
#
what do you feel about where things stand are there reasons for hope i you know the political
#
part of the narrative i don't think i know enough to comment on but if it was a multiple choice
#
question yes no i don't think i fully agree with the narrative and i'll explain what i mean i gave
#
you the example of how may have been a great inspiration thanks to anupam mitra how we
#
repackaged financial sector legislative reforms to mr pranam mukherjee you would agree and
#
especially after what you said you know your conversations with puja mehra would have convinced
#
you there was no hope in hell of getting a financial sector legislative reforms agenda
#
of the kind that we actually got through mr pranam mukherjee and i think my big realization
#
in that 10 minutes was i need to explain this in the paradigm to which mr pranam mukherjee belongs
#
he is an elected politician he is keen to solve the problems that he is convinced exist so if i
#
am able to first show to him this is a life problem it's affecting a large number of people
#
you have a mandate and a responsibility to solve this and let me explain to you why
#
of solutions a b and c c is the best and thereafter it was child's play
#
and i applied this lens it's just a thought experiment i did you know we were hawking
#
what i call the persian mystery committee report the m i f c mumbai as international financial
#
center which i still think is a brilliant idea there are excellent reasons why india generally
#
in mumbai in particular given its history is well placed to be if not a global at least a very high
#
quality regional financial center we went around trying to explain this report we didn't get much
#
traction many of the recommendations the report got done not because it was contained in the
#
report but it became a solution to some current problem i have very often imagined if i were to
#
explain the need for currency derivatives to let's say this government why does india need
#
an exchange traded currency derivatives to let's demystify this a little more given that
#
we'll have a general audience somebody should be able to go and buy on an exchange
#
bombay stock exchange or national stock exchange dollars or pounds or euros or whatever three
#
months from now at a fixed rate simply a currency derivative allows me if i have income which is
#
coming in dollars and i'm worried that dollar may move adversely in the next three months i
#
protect my rupee income by doing stuff in the exchange traded currency market where i hedge my
#
risk we've been trying an exchange traded currency derivatives market we have not been able to convince
#
a lot of key players in government that this is needed if i were to sell it
#
my thought experiment tells me you know if i were to go and do let's say a presentation in agra
#
agra chamber of commerce agra university maybe with honorable cm of up and you know
#
government of india ministers attending you remember that little Taj Mahal that all of us buy
#
a lot of us buy when we go and visit that small thing which we come and distribute to friends
#
it's made mostly in in and around agra and a lot of the carriers you know handicrafts people make
#
it it's got a lot of shining stuff because the minarets have at one point in time i went into
#
it i discovered it has double digit number 14 or 15 if i remember right precious stones
#
semi-precious stones the good quality and almost all of them are imported wow okay
#
now i broke it down and in fact i and my then colleague we did a small presentation
#
we broke down the currency risk of this small Taj Mahal manufacturer
#
in a little cottage industry in agra and the currency risks that he or she is exposed to
#
if i were to now make a presentation to this government i need to go and explain to them
#
this currency derivative that i'm talking about is not some city bank jp morgan fat cat financial
#
sector shark trying to get fee income if appropriately sold this is mitigating the
#
foreign exchange risk that this little fellow in agra is currently undergoing without even
#
realizing and the variations in his income on account of this is close to 20 percent now
#
a lot of india is actually globally seriously connected but it doesn't translate that global
#
connection into a forex risk an income risk an expenditure risk and if i am able to explain
#
this to the indian political establishment and say this guy is not capable of playing in the
#
forex derivatives market he should not but his banker should so if he is banking with
#
canada bank bank of baroda bank of baroda should be able to give him a product saying you have 14
#
items that you import the price of these vary you are actually being invoiced in dollar pound
#
or in some african currency you can lock yourself into a certain rupee currency today and likewise
#
a lot of the stuff that you make is actually getting exported and you're also getting exposed
#
to forex risk there so the intermediary the financial intermediary will offer you
#
a risk mitigation product that stabilizes your income it reduces your uncertainty now
#
i am as i said this is a thought experiment i can go if it's the prime minister i can go and talk
#
to him about the zary maker in surat now those guys have enormous forex exposures it's a market
#
he understands intuitively he has been chief minister of the state for long enough to know
#
the vicissitudes of that market so i think my this is my personal sense i have not done this
#
i have not handled this issue in this government i think we need to communicate differently
#
to the political establishment to make the case for markets that work well
#
for the poor and for those who are currently not included in the market so i am partly disagreeing
#
with your narrative of problem one i think the economists the think tanks the civil servants
#
who are perhaps you know explaining these issues to the current government need to maybe
#
take a leave out of the fslrc type presentation appropriately modify it address the needs of
#
today without jargon explain it in a manner that the current political
#
and the current establishment understands and then once you get their buy-in this government
#
is enormously powerful in terms of its executive ability in terms of its time of execution in time
#
in in terms of its ability to get legislations through i think it's possible i think it needs
#
to be done differently so this is like really fascinating to me in terms of how and you
#
illustrated this earlier in the case of ranam mukherjee and you know mrs gongopadhyay who wrote
#
that postcard to him that if you want to sell something to the politician you have to do it
#
in their paradigm in a language that they understand and i have a follow-up question
#
before we go into a break about sort of what you also alluded to earlier when you mentioned
#
that you went to varanasi and you spoke to those students you know i also get a sense of a an
#
incredible deep hunger for knowledge and understanding that exists out there and which
#
is not being served and be this also this deep aspirational sense of people who want to do things
#
and kind of be somewhere and the is of course is a particular fascination for some reason because
#
you'll even have youtube videos with titles like what an is officer's bungalow looks like
#
and there'll be a five minute video where this person is going through them so there is that
#
kind of fascination which is both sort of poignant at one level but also you know there is some hope
#
there and my question is this like for many years i've had the belief that if you want to bring
#
about lasting change in governance it is not enough to work on the supply side of the political
#
marketplace which is politicians and bureaucrats you have to go to the demand side which is the
#
people because it's one thing for a bureaucrat to explain something to a politician and in the
#
language of you know how it affects poor people but it's completely another thing when that demand
#
comes from below when the masses want something because then the reforms will kind of happen
#
and this is also for example a disagreement i have with ajay often where i'm like that this is what
#
we need to think about that you have a bunch of people who have great ideas who have great
#
clarity on how the world works and what is wrong with the country but we are unable to communicate
#
these ideas to a larger audience and that also has to be a mission and part of our sense of purpose
#
so what do you sort of feel about this and i don't for a moment pretend that i am
#
anywhere close to that because i think english speaking people are necessarily you know limited
#
by the language in a country like india so i hope if there are some listeners here who have natural
#
facility in the other languages that you can consider doing all your work in them like
#
whenever someone tells me i want to start a youtube channel or a podcast and all that
#
i say do you know another language maybe not as well as english but even 70 there because do it
#
in that because there is a hunger there and there is a positivity there so what do you feel about
#
this sense that we also need to be public facing we also need to find the language to speak to
#
larger audiences and that is really where change can happen completely completely agree and in fact
#
i would you know just taking the example that you did and the example that i gave earlier
#
if i want to sell the idea of an exchange traded currency derivatives market i would now actually
#
go to the agra small and medium industries chamber to make a presentation to them and
#
you're right about being able to talk to them not only in the language as in hindi but also
#
in the lingua that they are familiar with you know there's an idiom exactly there is a trade
#
language so we need to study this obviously ministry of finance or the js capital markets
#
can't be doing all this but we are talking about this reform community let's say we have the
#
equivalent of an mou with a kind of a think tank that we spoke about earlier and i want to make
#
out a case for exchange traded derivatives product we've just taken that as an example
#
you could apply this to you know many other spheres there are 2030 major pockets of small
#
scale industries in india which have global risk management issues that they intuitively understand
#
they don't know the jargon they don't know the modern terminology the bigger guys have figured
#
they've solved it but you know the tirupur big daddy exporter is now more international than
#
most international people but there are a whole bunch of small medium middle level people who
#
fortunately we have fora in the form of the small industries chamber or there will be a local indian
#
banks association they'll be able to round up 30 people and you are entirely right if collectively
#
the uttar pradesh chamber of commerce comes and argues with their chief minister and makes out
#
a case saying let's say sports goods we want to specialize we already have agra has some excellent
#
sports goods guys likewise ludhiana does these are the kind of financial sector issues that we have
#
the standard working capital limit doesn't work for us or the standard risk mitigation products
#
don't work for us and these are the kind of things that we need surely politicians will sit up and
#
listen and the reform argument is not anymore that which is suggested by kp krishnan and ajay shah
#
reform is responding to the problems that are getting pushed up from below indore or agra or
#
vijaywada comes and states a problem and says this is a problem i need solved and we are responding
#
you could solve it in this manner solution a there are five solutions comparatively we think
#
this is better and have a conversation reserve bank of india may have excellent reasons on i
#
don't agree with a a may be the best solution to your problem but it creates a whole bunch of other
#
systemic problems for us and we need to therefore modify a but the conversation will be far more
#
meaningful and i completely agree with you i think we need to move into i don't know what is
#
the appropriate machinery for this because beyond a point civil servants are not exactly
#
well placed to be able to do this and they don't have the bandwidth nor is it their mandate because
#
beyond a point i am not expected to go stand in the pulpit and you know sort of argue for a
#
particular answer but i think we need to create mechanisms whereby these bubble up from below
#
and civil servants regulators politicians get into this conversation along with domain experts
#
in responding to these problems and finding solutions and i think that's the only way
#
these will move forward and that's the only way to sustain them and seen in this light one would
#
have approached the entire farm laws amendment very differently there is a problem that panjab
#
is facing there is a problem that madhya pradesh is facing stagnant incomes increasing costs
#
but a lot of them see market as the enemy whereas in reality market is likely to be a solution
#
but there is a very strong perceptional difference and i think this needs to be explained it needs to
#
bubble up from below and then i think that likelihood of legislations going through reforms
#
going through are much higher and sustaining also much higher wise words and and for listeners i
#
will point you to an episode ajay and i did with on the farm laws so you know you can listen to
#
that complicated issue and a great tragedy at every level the economic level the political
#
level and so on and so forth and i wasn't suggesting that civil servants go out and
#
sell the reforms that need to be made i was suggesting that people like us on the outside
#
who care about the issue do it and that leads me to sort of an added question that the example
#
that you gave and i know it was only an example but the example that you gave is of convincing
#
and say an industry body of small traders but the danger there is that many of the things that bodies
#
like this will ask for actually go in the wrong direction for example the logical thing for a
#
body of small traders to ask for is tariffs to stop competition and tariffs as i often say really
#
redistribute wealth from the poor to the rich because you're taking wealth from the poor
#
consumers at large and giving them to this particular interest group and i think and
#
it's not really a question but just a sort of a me thinking aloud that the kind of propagation
#
that we have to do is just to a wider audience to the people at large and my worry there is that a
#
lot of the ideas that make sense to us are counterintuitive like people look at the world
#
in zero sum ways whereas we know that trade and prosperity are a positive sum game but getting
#
this across is really tough people think if somebody is winning somebody is losing equally
#
the whole notion of spontaneous order the way the markets work is counterintuitive people think of
#
the world is being planned in a top-down way and this quote unquote anarchy scares them so you and
#
i'm sure you must have faced these problems of getting across counterintuitive ideas you know
#
even within your circles even within government and all of that so what is your sense of how we
#
can tackle this yeah well said you know the example we took was not a consumer centric example i took
#
an example which is producer centric yeah and for that problem the natural audience is the chamber
#
of commerce but when you talk about issues like tariff it's a problem which has been you know maybe
#
30 50 years ago brilliantly highlighted by mansour alson in the logic of collective action
#
tariff on let's say imported cars in india harm a million customers prices will go up they probably
#
benefit three four five some very small number entities but they gain disproportionately
#
and kartik's book talks about this in greater detail it's it's something which we are familiar
#
with the million people who gain gain small amounts of money so the logic of collective action
#
dictates that these five guys do the lobbying and get what they want in public choice area is
#
called dispersed cost and concentrated benefits exactly so if you need to argue against this you
#
actually need to reach out to a million people very difficult in 1968 when mansour alson wrote
#
it but it's very easy today your own media for instance so i completely agree with you
#
one needs to figure this in terms of exact mechanisms clearly civil society organizations
#
think tanks universities are and writers public intellectuals are an important part of this
#
there will be chaos because there will be four views there will be six contrary views but people
#
have the choice and people are smart enough to figure out once they listen and the inherent
#
logic of a case so i couldn't agree with you more how exactly we do it is something one needs to
#
think about but increasingly this democratization of the policy options and feedback from
#
quote unquote people directly will i think be increasingly important
#
in getting to the right policies and making sure that we stick to them
#
we have a lot to talk about let's take a break and on the other side of the break
#
we'll continue our conversation thanks thanks omit hey the music started and this sounds like
#
a commercial but it isn't it's a plea from me to check out my latest labor of love a youtube show
#
i am co-hosting with my good friend the brilliant ajay shah we've called it everything is everything
#
every week we'll speak for about an hour on things we care about from the profound to the profane from
#
the exalted to the everyday we range widely across subjects and we bring multiple frames with which
#
we try to understand the world please join us on our journey and please support us by subscribing
#
to our youtube channel at youtube.com slash omit varma a m i t v a r m a the show is called
#
everything is everything please do check it out welcome back to the scene on the unseen i'm
#
chatting with kp krishnan and while you you know you dear listeners feel this continuity the truth
#
is a week has passed and we are now in another city sitting in a hotel room where i've kind of
#
set all of this up and krishnan's you know very graciously agreed to do this over multiple sessions
#
because i insisted that i don't want to hurry at any point i want to take my time and you know
#
before we go on and continue the narrative i think we'd you know reach the late 2000s before we go
#
on and continue the narrative just one question i want to ask like you mentioned that we have
#
to end by this particular time as you want to go swimming and i was told an anecdote by a mutual
#
friend that you love to swim so much that all your life you have never let anything come in the way
#
of your swimming so even at the peak of the financial crisis you know you would come out
#
from your swim and there would be like 50 missed calls from really important people we won't name
#
here and they'd be like the world is falling apart liman brothers has gone bust we need you
#
india needs you where are you while you never let anything interfere with the swimming tell me about
#
that sound bigger than the truth yes it had almost become a joke that after about 6 30 pm
#
i would be very sort of less focused and looking at my watch and once or twice dr subhara even
#
asked me said you're in an important position you can't be looking at your watch so my answer to
#
it's after office hours and all i need is 45 minutes so he asked me what was it that was
#
so important that i couldn't focus i said no no this meeting can go on if this meeting is going
#
on till 9 30 10 then my request is can i step out at 6 45 7 to 7 30 or 7 45 i shall do whatever i
#
need to do and i'll come back by 8 he said yeah you can but can i know what is it that you want
#
to do from 7 to 7 45 so i explained to him that at 6 45 the kiddies come out of the main delhi
#
gymkhana club pool and 7 to sort of whatever time 9 10 is the adults timing and if you reach
#
at 6 45 and get ready and get into the pool at 7 from about 7 to 7 30 you get the pool practically
#
so you can do your day's workout so yes it is it is a sort of used to be a bit of a joke
#
in my division that if you want this guy's attention please catch him before 6 30 but
#
if it required i was more than happy to come back to office and sit from 7 45 onwards and yes there
#
have been at least a couple of occasions when when i've come out of the pool and seen 14 missed calls
#
from chairman sebi seven missed calls from the finance minister all of which used to sort of
#
make you a little defensive but yeah good times no complaints no i would never have made fun of
#
you for this in fact i admire this deeply because i think you know what i keep telling my writing
#
students and what i try to inculcate in myself is that everything at the end of the day is about
#
habits and this is this is a superbly a it's a superbly healthy habit and b i would imagine
#
that that period of time you're spending with yourself in the pool is also a time of mental
#
peace and we all need it to unwind so i would actually urge all my listeners and i'm going to
#
i keep trying to implement myself that build habits it need not be swimming whatever it is
#
you know build steady habits and stick with them i want to ask you now about the financial crisis
#
and our good friend ajay shah told me your story about it that to me like if a web series was to
#
be made on india's response to 2008 this would be the opening scene the opening scene and this is
#
real life i must you know inform our listeners and remind you of the story and the scene is that
#
there is a basement and there is an event happening there and because it is a basement cell phone
#
signals don't go and ajay shah is moderating a session and the panelists are yourself kp krishnan
#
subharao and bhave so rb i and sevi are there and as the event goes there's no cell phone signal
#
obviously first a driver comes and tells you something then they tell subharao something then
#
they tell bhave something and then all of them have vanished and ajay shah is left alone on a
#
stage in the basement wondering what the hell was so urgent and what was so urgent was that mr
#
chidambaram wanted all of you to gather and this is in fact the dream team that tackled 2008 from
#
what i've heard along with many others i'm sure so you know it's a great cinematic opening scene
#
because i love storytelling and this is such a fun scene but tell me about sort of that period in
#
the sense that as you pointed out earlier in our conversation after india opened up in 91 this was
#
pretty much the first crisis that it had to face after being you know integrated into the global
#
economy so tell me a bit about exactly what was happening what were the worries explain the nature
#
of that to me and what was the kind of what were the kind of decisions that you had to take the
#
trade-offs that you had to consider uh true uh though a bit of sort of drama has been added to
#
that story almost all of it is factually true a it also shows you that notwithstanding hierarchies
#
this was a team that was very comfortable with each other we hugely respected the independence
#
of the sebi and the rbi and nevertheless we got along extremely well both as individuals and
#
professionals so when 2000 you know the when the leman crisis hit us a you're right this is the
#
first time that india was beginning to figure out that globalization is actually a two-way street
#
globalization brings an enormous amount of quote-unquote benefits one of which some purists
#
may have a different view on this one of which is there is an enormous amount of external money
#
that comes into the country and if you've got your structures right these are monies that go
#
into productive activities and given that you are what is called an i equal to greater than s
#
namely your investment requirements are much higher than your domestic savings category
#
which is true of all developing countries good quality external money which is adding to domestic
#
savings and increasing india's investment in productive capacity is obviously a very good
#
thing but the external money comes on account of considerations relating to india's investment
#
capacity likely return etc but it's also guided by conditions where it originates so if let's say
#
there is to quote the jargon risk aversion in the global economies let's say the us or the uk or
#
the countries where a lot of your foreign money originates if there is flight to safety
#
namely investors there want to go back to their currencies which has nothing to do with problems
#
in your country it has something to do with things that are happening there you will end up
#
becoming a victim of monies leaving your country so i'm de-jargonizing a lot of you know this flight
#
to safety etc but essentially for reasons beyond your control monies may leave your country and
#
when external money leaves your country it has an impact on the foreign exchange market
#
and given that you are now a globally connected economy it'll have impact on your domestic
#
financial markets and down the line i think this hit us when on that particular day when
#
lehman folded up literally within 24 hours when the london market opened and overnight sort of
#
rates of interest hugely increased literally within the next 24 hours you saw exactly the
#
same thing happening in india and contrary to what a lot of people felt that we were saved
#
from the ill effects of the gfc on account of the fact that we were not connected to the globe
#
it's actually the opposite i think we were fully connected to the globe the first round implications
#
of whatever was happening in the rest of the world was felt in india but i think india moved
#
very quickly and more important india moved in a coordinated fashion this is not something which
#
the government could have handled alone it's not something which the regulators could have handled
#
the securities markets were going through a difficult time the forex markets which is
#
regulated by the rbi were you know also impacted and typically when institutions are
#
say need of capital and if they happen to be public institutions or even private institutions
#
which need bailouts then it's taxpayers money and therefore it's not something which regulators
#
alone can decide the government needs to step in so it required coordinated action by sort of
#
a number of agencies and i'll just give you a flavor of this in the form of one or two examples
#
early on when this began to happen and we got a clear direction from the prime minister and
#
the finance minister that we don't want this sort of the negative impact to spill over because
#
the implications on relatively poor indians in terms of a let's say an interest rate hike
#
which usually increases emi and and there are a bunch of implications of this nature we are
#
worried about them but please get on to this and do whatever is necessary so i got onto a
#
telephone conversation with my former boss who's now the governor of rbi and i said sir we need to
#
do abc he said yeah i hear you krishnan i'm new to the job and it's you know something to be said
#
about dr subharao's humility he was just about a few months old in the job and he said on a lot
#
of these issues i'm going to defer to chandu which is mr cb bhave and you you guys you guys
#
have been around you know handling the subject a little longer but remember there will be pushback
#
from my people the rbi will have a different view on this so we need to figure out a way to reconcile
#
these multiple viewpoints but he was very clear that on a lot of these issues he will go by the
#
advice of mr chandu bhave and i and i was lucky in as much as we had the nipfp dea program i've
#
spoken about it we had access to excellent sort of first-hand knowledge of both theory and practice
#
in the form of the nipfp team there was also jahangir aziz who was principal economic advisor
#
in the ministry of finance he's a absolutely first-rate macro economist who had come from
#
the imf and his last posting was china he had come on second meant to government of india he
#
was part of our team and so and i also had an excellent internal team in the capital markets
#
anand bajaj who was director of external markets shashank saksena mr sahoo had left by then but
#
a bunch of people who are really outstanding so the number of sort of minor decisions major
#
decisions that got taken but one or two which stand out which need to be mentioned was a decision
#
that was taken that in case let's say an entity like a mutual fund which is not regulated by the
#
rbi it is regulated by the sebi it runs out of cash and it's running out of cash
#
not because it is actually insolvent but because the assets that it is holding are illiquid and
#
this is always a problem in a lot of financial crisis is an entity fundamentally insolvent or
#
is it the case that because markets are frozen because there is fear people are not buying and
#
selling the assets that they are holding are currently illiquid and it's a very thin line
#
separating illiquidity and insolvency and jumping into these kinds of situations is also
#
sort of fraught with moral hazard problems so do you want to support somebody who's been benefiting
#
when the markets were doing well but who's now not going to pick up the consequences of his or
#
her decisions and will socialize the losses that famous phrase of the global crisis privatized gains
#
and socialized losses is a true serious problem mr bhave came to the conclusion that mutual funds
#
were likely to be in difficulty because of decisions which are outside of their remit
#
to the markets illiquidity of markets and we should stand ready with a window to support them
#
to accommodate temporary mismatches and you know temporary cash flow problems
#
this was strongly resisted by the rbi and so we had the equivalent of what is now called the fsdc
#
the financial stability and development committee essentially a meeting of regulators
#
where dr subharao could not attend in person his deputy dr rakesh mohan had come and there
#
was one more person the chairperson of the indian banks association mr narayan swami at that point
#
in time i think he was chair of either indian overseas bank or pnb and a bunch of others and
#
the fm and the pm were very keen that we conclude these endless meetings and announced by let's say
#
this evening that there is such a facility the rbi stood its ground and said no we don't believe
#
that this facility is needed and somewhere along the way somebody alerted the fm so he walked into
#
this meeting which is a meeting of officers and he tried persuading and his style of persuading
#
shall we say is not very gentle and and he was beginning to lose his cool and the reserve bank
#
people in the meeting reacted very strongly very professionally but disagreed with him
#
and somewhere along the meeting he completely lost his cool and quoted what was being done in
#
the uk and the us and asked our rbi if we guys have knowledge of economics beyond what sort of
#
uk and us knows and if they have accommodated a whole bunch of non-regulated entities during a
#
crisis what is this theory that you are holding on to and then i remember mr narayan swami public
#
sector banker gently walked up to mr chidambaram and said sir you need a cup of coffee and mr
#
chidambaram snapped saying no i don't drink coffee he said yeah sorry you need a cup of tea
#
can we offer you a cup of tea can we go out and he took him out of the room
#
and took him back to his room and said sir why don't you sit here and have your tea
#
allow us to figure out a solution and that's the time i made a call to dr suba rao who said
#
what does chandu think i said i'm doing this at the request of mr bhave and here is a letter
#
and i said we don't have too much time sir and the fm wants to go public with it the pm wants
#
to go public with it before the 9 pm news so we need a quick decision and dr suba rao picked up
#
the phone spoke to his hierarchy and said full stop you guys will agree to what krishnan and
#
mr bhave are suggesting and there is no further debate
#
this announcement was made and more important it turned out to be exactly what we had expected it
#
would be which is if you make the announcement the problem will go away the fact that there
#
is somebody ready to backstop you gave confidence to the market that these transactions will not
#
fail and there will be a backstopper of the market in retrospect i'm glad it all worked
#
this could have gone horribly wrong so this is just one instance there were multiple incidents
#
of this nature but i think the good part is this whole machinery worked extremely well because
#
there was zero doubt about the other's integrity the other is objective the other is agenda there
#
were clear differences about approaches but eventually a it all reconciled and i think
#
you know a lot of the non-civil servants will find this odd in the end clearly dr suba rao
#
is a 1972 batch ias officer mr bhave is a 1975 batch ias officer and i'm an 83 batch ias officer
#
and we defer to hierarchy and there were matters on which dr suba rao disagreed
#
and said look this is my considered judgment i may be new but i am telling you this is what i feel
#
and very often we agreed with him so in a sense i think the hierarchy helped but more important
#
collegiality decency a very civil way of approaching including the political hierarchy because there
#
were occasions where we've actually disagreed with dr manmohan singh and he said it's fine
#
you guys have more data than i i am not handling this crisis at level one you guys are in the pit
#
you are handling the data you know exactly the forces that are sort of at play take a call keep
#
me informed and i mean i didn't have that kind of a direct interaction with the pm i used to be
#
briefed on this is what the pm said because we were much lower in the hierarchy but on balance
#
i think the global financial crisis india's response and and it's been written about by
#
you know by jahangir a lovely paper by jahangir elah and ajay where they capture a lot of the
#
drama joshua feldman who used to be and probably been on your show and an excellent imf macro
#
economist and a great friend of india he was another person who sort of pitched in with
#
knowledge of what's going on so it was a great team effort on the whole i'm glad it worked you
#
know in the end it's happy to look back and say we did it very heartening to sort of hear these
#
stories whenever i do from ajay and josh and you and almost seems like a golden time these great
#
minds coming together and working together and you know many years back perhaps even decades back i
#
read a book by george soros called the alchemy of finance and that had the term reflexivity
#
you know which is essentially about how the market may be a certain way but just how you perceive it
#
can change the reality of what the market is and this you know the fact that this announcement was
#
so important to mr chichidambaram and it did in fact calm the market down and stave off the
#
eventuality more than the policy decision just the announcement of the policy decision seems like a
#
great example of you know that phenomenon where perception matters so much and the way this was
#
handled exactly they both you know used to use you know we found a one statement deep liquid
#
but fairly regulated markets both mr chidambaram and dr manmohan saying and i think they both
#
brought a very wise sort of intuitive understanding of how markets work and precisely
#
what is the role of the state in markets it was never heavy-handed but when required they didn't
#
hesitate so i want to ask you something that i have often thought about and you know you mentioned the
#
term moral hazard and it it feels that there is this incredible trade-off being you know debated
#
across around the world circa that time where on the one hand it is you know the way a good
#
market should work is if somebody fails let them fail and that exact phrase which you pointed out
#
privatizing profits socializing gains you don't want that to happen where a company can ride the
#
good times but it knows that if it fails we're too big to fail we'll be taken care of right that
#
creates entirely the wrong incentives the risk taking goes out of whack and so on and so forth
#
and that is something i believed in firmly at the same time you know there is all this talk
#
of how if you allow some companies to fail in a moment like that the whole system breaks down
#
so therefore the state has to step in and rescue them and so on and so forth and the question that
#
then comes to my mind is that surely there is something wrong with the design of the whole
#
system then that it becomes necessary to step in once in a while that people are that you ignore
#
the question of moral hazard that people are allowed to privatize profits and socialize losses
#
so what is your sort of sense of that i mean i know it's a bit of a meta question but
#
it's a meta question but let me answer it with a live example from india of the same global financial
#
crisis given that you know there are sensitivities involved in terms of the individuals and the names
#
of the entities i shall not mention the names the particular financial sector entity globally
#
well connected and the soon after lemann happened and the london markets spiked up
#
i referred to it earlier in terms of rates of interest going up this institution was
#
generally perceived by a lot of players in the market to be more exposed to external finance
#
than was fully reflected in their books by mechanisms that were entirely legal
#
but operated through subsidiaries etc etc so not very easy to unravel but entirely formally legal
#
and this institution when this sort of impression spread the institution began to feel the pressure
#
in terms of indian investors asking questions about its exposure and things like that
#
around this time one of the private televisions you know the private news media
#
started making this huge demand for like the rest of the world namely the us and the uk india should
#
consider banning short selling of financial sector stocks to demystify de-jargonize short
#
selling technically is selling something that i don't have in the belief that prices are going
#
to fall and i have knowledge publicly available knowledge which i have processed and i have come
#
to the conclusion that price of a particular stock is going to fall i will sell it in advance
#
i'll sell it today the transaction takes place day after tomorrow and when the price will fall
#
i'll reap the gain the argument was short selling was becoming punting and we are being targeted
#
financial sector stocks should not be allowed to be sold short was the demand and the demand
#
on the prime minister became quite intense and this was i think a non-working day
#
and vaithi p vaithyanathan of indian express has actually written a public story on this
#
so i can i can share some of this the part that i'm going to now tell you because he's written
#
about it otherwise i wouldn't have spoken about it we had gone to the fm's room i was summoned
#
and i was i think doing a run or something and i was told that drop everything and come right
#
away so i showed up and i was in a round necked t-shirt it didn't even have a collar but i was
#
fortunately in you know full trousers i wasn't in a pair of shorts so i show up in the finance
#
minister's room and dr subharao was not in india or not in delhi so chief economic advisor i think
#
mr arvind virmani i don't recall who it was he was sitting with the fm and i was asked to come
#
in i went into the room and fm was very agitated the fm wanted to know what is this business about
#
short selling pm has been telling me repeatedly and i've said we should ban short selling if it's
#
going to be important for india and you guys are assisting and he looked at the chief economic
#
advisor and asked him can you explain this and the chief economic advisor went into black
#
sholes model and and a whole bunch of technicalities the fm stopped him and asked me can you please
#
talk about short selling so i mentioned exactly what i told you plain english and said it's not
#
a good idea sir there are people who are tracking this and they have a live interest in tracking
#
this because they are holders of you know equity in the financial institutions and it's the
#
processing of information of these millions of people which eventually shows up in the form of
#
price which is the signal that you and i need to look at so it's not a good idea to ban short
#
selling and i was explaining this in some bit of jargon so he got angry he looked at me and said
#
can you stop both of you can you stop this mumbo jumbo and plain english and and speak in plain
#
english i said yeah i'll try and i said something which i should not have in retrospect i said sir
#
it's actually the analogy is very simple let's say you have fever and you have two job sort of
#
two options you can use a thermometer find out do you have 99.8 or do you have 100 100.2 and
#
depending on you know if you find that you have 100.2 maybe you need to have a paracetamol
#
but you have another quote unquote equally good option break the thermometer you don't even know
#
you have fever and the consequences can then be very deleterious till then was fine and i said
#
was that plain english enough fortunately for me his rax telephone rang rax is that instrument
#
which connects higher civil servants and before he could react to me i could see he was getting
#
extremely angry with what i was saying the racks rang he picked up the phone and at the other end
#
was subbu private secretary to the pm who said i assume he said so pm is ready you can come now
#
so he put the phone down he completely forgot our conversation i was glad he got up and said
#
okay you guys come along we need to go to the pm now i was happy because i realized as soon
#
as i had said what i had said it bit my tongue but it was sort of he had forgotten so i said sir i
#
came unannounced because i was actually running in nirupak and i was called i'm in a round necked
#
t-shirt i don't think i should come to the prime minister's house like this and as he was walking
#
and wedi has quoted this in his piece he said the prime minister isn't exactly looking for grooms
#
you are perfectly fine the prime minister is called us for a he's called us for a functional
#
meeting please get into my car and run we don't have time so we ran and this is a fascinating
#
meeting and why he has again spoken about this prime minister said he named the people who had
#
spoken to him i will not name them now maybe 15 years later we'll have another conversation
#
where i'll name them and he said they're bringing pressure on me and it's two days i haven't got an
#
answer fortunately you know i remember and i think there was some perhaps an earlier alert i'd taken
#
out a couple of papers from the old files going back to the times of dr manmohan singh
#
he had constituted a committee when he was finance minister in the last days of his finance ministry
#
days on risk mitigation instruments in the indian securities market in the indian securities market
#
was an incipient market you know it was about four five years after sebi 92 sebi i'm talking
#
about 95 96 and there was a committee recommendation by somebody who is now part
#
of the media and who was screaming for banning of short sales who had said india should introduce
#
short sales and there was a gupta committee which had gone into this subject and percy mystery
#
at that time an economist in london was a dissenting member the gupta committee did
#
not recommend the introduction of short sales much later yashwant sinha's time i think this
#
decision was taken and short sales were actually introduced so i had taken some of those papers
#
and i mentioned all this the prime minister said yes it is a sad day that i need to learn
#
or relearn my economics from public television but i'm glad that you guys have come up with these
#
papers what is your unambiguous recommendation so the fm turned to us and said you can now sprout
#
all your mumbo jumbo again because he will understand i don't understand you guys can
#
speak to him in the language that he and you understand so the chief economic advisor and i
#
spoke and the pm wanted to know if dr bhave also was of mr bhave was of the same opinion
#
we said sir yes but just before coming to you i've had a conversation with him he is in agreement
#
with us he does not want a ban of short selling he again looked at us and said i am completely
#
in agreement with you but it's not a decision i should take it's a decision the finance minister
#
should take if the finance minister is comfortable he should go ahead and he looked at mr chidambaram
#
and said we will be standing alone a lot of the oecd markets have actually banned not all short
#
sales but short sales and financial markets i am in a logical sort of economic sense convinced
#
about what your officers have told me take your call my advice to you is that we should stick
#
to what your officers are saying but entirely it's your call mr chidambaram didn't take a minute
#
he said i agree with them though i think we are standing out maybe we are you know being risky
#
we the two of us then mentioned moral hazard we said this is not really for the market we believe
#
this demand is coming from one entity primarily for its own private economic gains we don't
#
believe this is a market-wide requirement and there was an enormous amount of publicity and
#
this public television at 9 p.m and it's sort of prime news went to town and announced an ostrich
#
like sebi buries its head in sand refuses to do what the rest of the world is doing etc etc
#
touchwood we were right nothing happened the institution got hammered a little more the
#
world figured out that this was an institutional problem not a general indian problem and things
#
eventually settled down so i completely agree with you you know this business of being able to
#
distinguish what is likely to be privatization of gain socialization of loss is a difficult call
#
and again i believe we were also lucky you know we didn't have that extensive a problem like the
#
u.s had like the uk had one or two institutions maybe would have gone down under but it was not
#
an entire bunch of institutions so to that extent in a sense the financial system and
#
capitalism had run wild in those places but it would be a serious difficult issue if we
#
were in a similar situation we were lucky that it was contained and we didn't have the moral
#
hazard problem as it finally turned out you know your thermometer analogy is just so brilliant
#
that i'm going to steal it and why did you feel it was offensive because you said he could have
#
fever and it would happen to him is that why no the last sentence you know the thermometer
#
was fine the consequences of making no i should have kept quiet i asked him rather childishly
#
was that plain english enough because he had said will you guys stop speaking in mumbo jumbo
#
and speak in plain english i should have answered him and kept quiet i rhetorically said was this
#
plain english enough and you don't do this to your minister it's it's his he is a gentleman
#
he unfortunately the call came but you know in retrospect a joint secretary needs to behave much
#
better and i've learned my lesson were you exasperated in that moment no i i think i i
#
have a tendency to speak beyond what is necessary i've often been pulled up by my hierarchy my
#
well-wishers and my wife so i do have a tendency to speak you know more than what is required i
#
guess this is one of those foolish moments no and i i get such a warm fuzzy feeling from just hearing
#
all these stories of all these people respecting each other listening to each other's opinions and
#
of course it so happens that i'm kind of biased that i agree with you know the general consensus
#
in all of these rooms from what i can hear but i want to ask you sort of a further question about
#
the governance of that time because it seems to me that there was something there to look at and
#
admire that mr manmohan singh may have been berated often for being silent and so on and so
#
forth but there was great wisdom in a lot of what he did for example before this he showed a certain
#
fortitude and getting the nuclear deal through with you know the u.s against the wishes of the
#
left and so on and you know you've mentioned earlier and i'll ask you to elaborate now on
#
on how that is also a sign of the you know a reflection of the kind of governance that was
#
going on in those days so you know what is your sense of that because i feel like you know we
#
discussed earlier in the episode about how everything then kind of changed and there was
#
sort of a i don't know if the word degradation is too strong but that sort of amity among good folks
#
no longer sort of seems to be the rule but tell me a little bit about the governance
#
style of dr singh tell me a little bit more about f atf the kind of decisions that had to be made
#
and the broader vision that you took of india's place in the world so financial action task force
#
which is you know the short form is f atf is i think a great example of leadership but done
#
so gently so nicely and without too much of just thumping and it was sensitive so it was also
#
important to not needlessly play it up and and let me step back and start from the you know begin
#
from the beginning f atf was a small little sleepy body sitting inside oaced the organization of
#
economic cooperation and development headquarters in paris and primarily it was meant to cleaning
#
out the global financial system and it used to make some recommendations in 1988-99 they had
#
written to india inviting india to be a member and the ministry of finance sort of processed
#
this request and said this would be one more needless sort of you know talk shop and there
#
doesn't seem to be too much gain in becoming a member and it was decided to sort of bury it
#
and we didn't take it forward all of a sudden 9-11 happened and if you remember one of the major
#
investigation findings of 9-11 was the tremendous movement of money that had taken place
#
within the united states as well as monies flowing into the united states to fund what
#
were these big terrorist activities so aml cft to use the jargon anti-money laundering and
#
combating the financing of terror became a global agenda because it became an important part of
#
u.s agenda so post 9-11 the u.s decided and with full sort of agreement of the oecd and the you
#
know sort of the developed world we need to mainstream this cleaning out of the global
#
financial system of its ability to finance terror and they linked the two money laundering and
#
financing of terror go together so financial institutions need to put in place a whole bunch
#
of new norms to make sure that this doesn't happen these took the form of what were then called 40
#
plus nine recommendations of the fatf and in one sense recommendations is a bit of a misnomer
#
because they were effectively binding in as much as if you are not in tune with them
#
external institutions would stop dealing with you so a global player in the financial market
#
in singapore or in uk or in the u.s could turn around and say sorry xyz bank or institution in
#
india you and your country are not fatf compliant we will not deal with you in a sense this can
#
become a non-tariff barrier for financial services so that's the way it is playing out so in 2005 when
#
i joined the ministry of finance handling joint you know capital markets one day my then secretary
#
mr ashok jha called me and said there is a golden rule in government which is if you have
#
some glamorous desk as part of your portfolio as a joint secretary you also need to carry some not
#
so glamorous you know some pain point that so that your portfolio is more balanced everybody has to
#
carry a bit of slightly difficult tasks so i'm going to hand over this fatf to you i didn't know
#
what fatf stood for nor did he he said this is something which every joint secretary is rejected
#
so it must be some terrible thing but i'm not giving you a choice so please go back and get
#
into this so i called my team there was a sleepy team wasn't interested at all and they said sir
#
paris say you get some communiques 40 plus nine recommendations none of this pertains to department
#
of economic affairs half of this has to be done by revenue the other half has to be done by financial
#
sector regulators there's something to be done on gambling we don't even know who do we write to
#
there's something to be done on you know the safekeeping those safety vaults in which people keep
#
value that is if it's in a bank the bank regulates it but you can have a non-bank safety vault
#
so there are recommendations that are all over the place and we've been saddled with this we have
#
nothing to do with this you know this should ideally rest in some other ministry i said look
#
all that is over i've been given this division we need to do something and then i decided to
#
get into it then i discovered that this is effectively a show stopper in case we don't
#
align ourselves with fatf standards our entire effort and and remember this is a time when a
#
budget announcement has been made in the budget speech of 2005 that mumbai should attempt to
#
become a global financial center a persimistry committee has been constituted and these are
#
times when india is trying to become more and more of a global player and globalization is also
#
generally on the ascendant so this sounded very odd that this very major requirement to be a global
#
player is not getting the attention it deserves i ran around put together a missionary
#
figured out what it requires it needed enormous resources and capability which we didn't have
#
so we figured out some jugard type solution you know we'll get some help from fatf
#
but we'll also need external consultants who know this better so we got some approvals and
#
got an external agency to support us and we had now a laundry list of what all is required
#
and this was very extensive you know some changes of legislations carrying out of treaty commitments
#
that india had made but not executed so we wrote a note explaining that this is certainly in india's
#
interest but it's very heavy lifting and we need to go for the membership and becoming a member of
#
fatf is important otherwise you will be left out of this global financial game and we need to do
#
all that we sort of are required to do dr subhara was very skeptical and as is his won't he went
#
into depth and only when he was 100 convinced that we were right did he allow that you know
#
one and a half two pager to sort of go past him it went to the fm who again took a sort of quick
#
series of meetings and and he was intellectually already sort of on board he agreed so he added a
#
small paragraph supporting this and he said this is across departments in government
#
we'll need very serious cooperation of ministry of home affairs ministry of external affairs
#
corporate affairs these are you know big daddy ministries so i would be comfortable if we get
#
the pms approval we completely agreed with him so he sent it off on a sealed cover to the prime
#
minister around say this time you know 6 37 in the evening so we went away saying
#
you know we don't know how long this will take next morning when i'm in my office at 9 11 9 10
#
whatever early we used to be early because mr chidambaram and dr subhara were very early
#
reachers of the you know to the office before 9 and invariably all their calls to us would be
#
between 9 and 9 15 because they are unburdening their day's agenda i'm sitting on my table and
#
came a sealed one of those top secret sealed envelopes with multiple signatures i open it
#
the fat file is back on my table and handwritten three and a half paragraphs note
#
of the honorable prime minister of india
#
such i i wish i i could reproduce it verbatim here maybe at some point in time we will i will
#
read out that note because i think i've kept a copy of it somewhere it basically said that
#
india needs to be part of the high table when it comes to standard setting the global game is all
#
about how you set standards because you sort of work into these standards your requirements
#
if you set standards which are entirely aligned with the us or with the uk or with france you
#
are out of the game before the game has begun so you need to be part of the guys who make the rules
#
in plain english because the games are going to be played according to these rules so a
#
contrary and i quoted the ministry of external affairs which had completely disagreed with
#
my assessment that india a should make a bid for fatf membership and we are ready
#
the foreign secretary madam nirma rao violently disagreed with me and she urged me saying that
#
you're putting us in difficulty we should not try this we will not succeed
#
Dr Manmohan Singh explicitly dealt with the mea objections and said no india is not punching
#
about its weight it's time we realized that this is our weight and we need to be part of this
#
process because if we miss the bus now like we did in the past we would end up receiving standards
#
and we constantly sort of be defensive about trying to adhere to those standards which are not
#
necessarily to our benefit so he gave such a clear go ahead and also wrote a couple of lines about
#
how we should go about this and he said the cabinet secretary should lead a committee of
#
secretaries which should review this in a fixed periodicity make sure that multiple departments
#
do what they need to do and this can't now be a da alone fight da is the coordinating department
#
and these things don't get done in a department they get done in government and this has to be
#
a coordinated cohesive sort of plan of the entire comprehensive plan of the government of india
#
da should be the sort of the you know the agency which leads it be the secretariat but
#
cabinet secretary kindly take the lead do whatever is necessary we were thrilled but it meant an
#
enormous amount of work but the direction was very clear so couple of days later the cabinet
#
secretary had also been sort of endorsed on this he calls a meeting mr km chandrasekhar who used to
#
be former he was secretary in the department of revenue very familiar with all of these issues
#
the pml act the prevention of money laundering what is called anti-money laundering in the
#
rest of the world in india is called prevention of money laundering he was familiar with it so i'd
#
gone to him and i'd actually gone to him earlier when my teams were protesting saying this is a
#
department of revenue issue he was such a wise man ordinarily somebody else would have tried to
#
grab it he said krishnan the department of revenue in government of india is a very inward looking
#
department it's a very domestic focused department department of economic affairs is the phase of the
#
government which deals with the external world you guys may not be dealing with the legislations
#
but you guys deal with the rest of the world you understand the global jargon you understand what
#
the imf is saying so institutionally i think you guys are better placed we will do all the support
#
we can now he was the cabinet secretary he took a committee of secretaries meeting and i went there
#
with the presentation and my first slide said something about benefits of membership the need
#
for membership costs you know the benefits outweigh the costs and all that the home secretary
#
and the external affair secretary both said sorry we disagree there's too much that india needs to
#
do and i don't think we should so mr chandasekhar looked at me and said brahmastra so which is my
#
second slide the reproduction verbatim a photo of dr manmohan singh's handwritten note was slide
#
number two so he i placed it he said you guys can take a minute do you want krishnan to read it out
#
the silence he said now the agenda no more is do we want membership the agenda is how do we get
#
membership the first requirement was there is something called the palermo convention india
#
had agreed 2004 that we will criminalize activities relating to theft of nuclear weapon parts
#
financing of this theft so we had already signed the global treaty but global treaties have to be
#
implemented internally which means we had to do changes to our legislation to implement those
#
global treaties the first candidate was ministry of home affairs mr pillai was very angry home
#
secretaries are normally senior people they don't get told that you need to do this so but
#
mr chandasekhar thereafter just took over the whole exercise and i'll cut a long story short
#
everybody postal department corporate affairs department of revenue ministry of home affairs
#
ministry of external affairs including legislative changes which came about thanks to our own
#
equivalent of 9 11 the next round when terrorists attacked mumbai we made all the changes to
#
legislations that were required to be compliant with fatf we made a whole bunch of changes of
#
non-legislative instruments and my happiest sort of memory of this is 29 7 2010 in amsterdam when
#
much against you know anticipation of the whole world india became the 40th member
#
of the fatf and incidentally the last member of fatf fatf then decided that we will only allow
#
other countries to come through regional bodies we will make the regional bodies associates of
#
fatf this will be the last membership and we continue to be a member of this very powerful
#
global standards setting body and i think we owe a lot to the political administrative leadership of
#
that time which did all of this very quietly and and all of us did this quietly because this was
#
an important legislative policy type activity and these are not amenable to you know youtube videos
#
you don't go around publicizing these because fatf is also a very quiet technical body it doesn't
#
like too much tom tomming of these standards so i think it's a great sort of effort at coordinated
#
external and internal decision making by india in what i think has been a very subsequently also
#
it's turned out to be an extremely significant decision i love this journey of thinking about
#
whether we should comply with this to moving to we should actually join and set the agenda and
#
kind of you know be a party at the table and and that's an inspiring story
#
while you were narrating this story i remembered an earlier question that i
#
asked mr madhavan of prs when i did an episode with him which is about the many different skills
#
that politicians require when they get into office like the skill that successful politicians have
#
mastered is the skill of winning elections and playing the political game but when they actually
#
get to the apex then there is the additional skill of governance of first figuring out what
#
are these complicated subjects and then figuring out how to do the governance now it seems that
#
dr manmohan singh partly because of the unusual route that he took to the top of politics you know
#
didn't have to master the political bit but he already had a an instinctive and deep understanding
#
of policy matters and economics and so on and and be therefore the governance wasn't really a
#
problem for him he had that intuitive grasp that he can get that note from you at 7 p.m and by
#
you know nine o'clock you have the note from him which obviously he put a lot of thought into
#
and my question there is that it seems to me that the a he is an outlier in that sense and b the
#
best kind of politician that i can then imagine is perhaps and correct me if you you know disagree
#
or have no answer to add would be someone like a narasimha rao or a vajpayee who have mastered the
#
political game and have the humility to recognize that they need to rely on experts in matters of
#
which they have no personal understanding and pick the right experts and you know don't make it a
#
matter of ego and so on and so forth and that's the best that you can hope from from a politician
#
because it's very unusual for someone like dr singh to actually also master the political game
#
and therefore like one how would you respond to this and two therefore when one interacts with
#
politicians as you have done throughout your career how does one how does one negotiate this
#
because you must be coming across a spectrum of different kinds of approaches and attitudes
#
from politicians so what has your experience been like i actually completely agree and i don't think
#
it's restricted the names that you mentioned my own personal experience at the state level i worked
#
with many many ministers the present cm of karnataka mr sidramaiah there was a very fine bjp
#
legislator who became home minister of karnataka dr vs acharya i used to know him when he was a
#
municipal corporator enormously gifted politician and and very wise i am actually reminded of you
#
know this phrase that manish sabarwal often uses which i thought he quotes somebody i can't remember
#
who he quotes which basically says that politicians campaign in poetry but they rule in prose the
#
government in prose and i think that's a lovely way of putting it i would actually say this is
#
true of almost all the politicians i worked with i gave you examples of dr manmohan singhan you
#
are right he is not in that sense a hard-boiled politician but in addition to all the qualities
#
that you mentioned i think what made it easy for us and him in this decision an enormous grasp of
#
global economic institutions and how does the global economy function and i think that's a
#
very important requirement in this world but i won't stop there i've subsequently though it
#
is a brief stint i'd worked with mr jaitley and and we will i'm sure get to talk about
#
things like inflation targeting which is a legislative change that mr jaitley made
#
literally on the basis of a one-hour briefing and the tremendous political sense that he
#
brought to the table in understanding complicated economics and then translating this into
#
public interest in policy likewise mr dharmendra pradhan who is my minister in skill development
#
similar issues that great marriage of this is what is technically desirable
#
this is what is required in the public interest but this is where politics is headed how will i
#
reconcile the three and yet come up with a solution which is certainly an improvement on where i am
#
today it may not be what the technical expert said is the ideal but it is pushing the needle
#
and you know the agenda forward and i didn't have too much interaction with the current prime minister
#
but on one matter where we did and i'm sort of jumping the gun i'm getting into skill development
#
there is the prime minister has a review it's called praghati it expands into you know and
#
it's it's actually a progress review mechanism it's a very interesting mechanism that is
#
instituted if i recall right it used to be the last wednesday of every month it's a fixed time
#
three to four where there would be an agenda that's circulation in advance some of them would be
#
projects some of them would be programs some of them would be policy related discussion
#
chief secretaries secretaries to government the prime minister the cabinet secretary the
#
prime minister's team would be in attendance and in the course of the review let's say you are
#
reviewing xyz highway project why is it stalled the environment clearance related issues
#
what is the environment related issue does that require a change of framework
#
what is the procurement issue so it would be the review of a project but there would be lessons
#
drawn on do we need to change this policy please get into depth etc etc there was a review of
#
the pradhan mantri kaushal vikas yojana which is the skill development program launched by
#
this government and we weren't you know making terrific progress there on some issues we were
#
delayed the meeting itself was great fun i was presenting and i had worked very hard to do a
#
presentation which is you know you are allowed four or five slides i decided to do a presentation
#
but speak in hindi and the prime minister has told us many times that you guys don't need to
#
necessarily speak in hindi i fully understand functional english i may respond in hindi but i
#
entirely follow what you're saying so you feel comfortable speaking in hindi but i thought you
#
know it will carry more punch and i'll make my own position very clear to him because i recall
#
this famous statement that mr vajpayee once made to my boss dr jalan they used to have
#
conversations i believe on the economy and couple of very fascinating stories about that and and
#
hopefully we'll have occasion to talk about those another time but on the third fourth conversation
#
when dr jalan began to feel that he was imposing on the prime minister and probably you know a
#
polite remark at the p.m that i'm probably taking it more seriously than is warranted
#
i am not i am a politician but by temperament i am a poet
#
i have no understanding of trade and commerce then he sort of looked at him mischievously and said
#
he will lose i may have got the hindi wrong he will lose or she will lose his office
#
if he does not understand what's going on in bombay
#
I understand what is happening in Mumbai's thinking, Indian trade, commerce, industry.
#
So one reason is that you continue this conversation.
#
Second, you are explaining all this to me in Hindi.
#
My English is fine, but Mr. Jalan, I think in Hindi.
#
I thought this was a lovely phrase.
#
That I think in Hindi, and when you explain monetary policy, Reserve Bank of India, foreign exchange, rate setting in Hindi,
#
then my understanding, my knowledge increases a lot.
#
So you continue this conversation.
#
So I thought it would be useful.
#
My presentation can be in English, but I will speak in Hindi.
#
And I worked hard on it. My Hindi is not bad.
#
But this Prasanik Hindi, you know, where half of it is complete, you know, it's Greek, it's not even Hindi.
#
It's Shudh Hindi. You don't use it in everyday speech.
#
It's Shudh Hindi. So the Pradhan Mantri actually speaks very functional Hindi.
#
He uses inflation. He will not use some Hindi phrase for inflation.
#
So I'd done a presentation of that nature. It went well.
#
And at the end of it, he said, but your progress on this thing is less.
#
So I said, sir, this issue has been pending for many days.
#
I've been trying, but I'm not able to get through the Committee of Secretaries.
#
And the issue was simple.
#
I was trying to make the point that skilling is globally a local merit good or a local public good.
#
So you would typically see municipalities, local self-government, because you need an assessment of what is required.
#
And typically these are services best delivered by the government that is closest to people.
#
Ideally, therefore, local governments would do skilling.
#
But the paradox is the market is a national labor market.
#
So I may do the skilling in some interior part of Madhya Pradesh,
#
but that kid who is going to be skilled may end up working in Bombay, end up working in Gurgaon.
#
And you need a national framework to recognize because this word of mouth certification worked
#
when you were in a village.
#
But if I'm showing up in Mumbai and I have nothing but my credential for you to hire me or allow me to do a carpentry job,
#
I need to have a national framework to recognize this.
#
So I explained all this in practical Hindi.
#
It took exactly seven days for this matter to be brought to the Cabinet.
#
I was proposing a new national regulator for vocational education and training.
#
And it was getting blocked because A, a lot of the bureaucracy thought that this is an empire building.
#
Everyone is making one regulator.
#
So this Ministry of Skill Development also came down.
#
And government is against creating more new bodies.
#
So in my opinion, mindlessly, I was being blocked and I didn't want to jump the hierarchy.
#
And in these bureaucracies and public systems, you don't necessarily go on top of the head of your bosses.
#
But here is a wonderful opportunity.
#
Routinely in Pragati, he asked for reasons of why we were not making Pragati.
#
In the course of which I explained, exactly six days he brought the matter to Cabinet, cleared it.
#
And the National Council of Vocational Education and Training is a good new modern regulator, which is working now.
#
So this is my only experience with this Prime Minister.
#
But I hear often that in a sense, he's that combination of poetry in campaigning and governing in prose.
#
So I think politicians intuitively do this.
#
I mean, I mean, the counter to this that I can think of is, of course,
#
demonetization with which every expert would have advised against,
#
but he nevertheless went for it without even informing his finance minister from what I hear.
#
So, but I can't ask you to comment on that because you won't.
#
I won't know because I only know of it based on media reports, but it's instructive.
#
I think you should read the latest on this, which is the book by my batchmate Subash Garg called We Also Make Policy,
#
where he talks about, I'm not sure if the finance minister was not aware of it.
#
He has a different view. But yeah, it's not something I know personally.
#
So not exactly in a position to comment on it.
#
Fair enough. Let's move on.
#
So now tell me about another sort of like there are two more sort of policies you were involved in,
#
which I want to talk about, which many refer to as the last two good things done by this government
#
before everything went to hell.
#
Those are my words and my characterization, not yours, of course,
#
which are inflation targeting and the bankruptcy code.
#
And the bankruptcy code was also worked on by dear friends of mine, Susan Thomas and her entire team at IGIDR,
#
as it was then and so on. And they are dear friends of mine.
#
And it's also something that not many laypeople really know about,
#
but was nevertheless a really important policy and a triumph.
#
So tell me a little bit about how that came into being and the process of pushing that through.
#
Perhaps the best way to describe this insolvency, bankruptcy code in plain English is something which
#
Arvind Subramaniam much later wrote about and spoke about.
#
And he said the bane of Indian capitalism was freedom of entry, complete lack of freedom of exit.
#
The short point being businesses can fail.
#
Not all businesses fail because of fraud, because of missed manner.
#
Business is all about risk taking, your assessment of what will work in this market.
#
And by definition, in a creative destruction sort of economy, many businesses will fail.
#
And the idea of bankruptcy and insolvency is that shouldn't put you down forever.
#
And we are in a limited liability era. I am a company. I have limited liability.
#
And if it's an honest mistake, we should settle in the best possible manner.
#
And if it's a going concern, let the company sort of get back to its feet,
#
maybe with new owners who are willing to put new money, additional money, run it.
#
And if it can't, close it down.
#
India has had a problem with it, partly because of, I think,
#
misplaced consideration of protecting employment, et cetera, et cetera.
#
So there is a long history of committees that have gone into this,
#
including Raghuram Rajan in the late 90s, early part of the century.
#
So in the budget for 2014, when we were working on it,
#
I asked, Mr. Mayaram was my finance secretary.
#
We both were in discussions with Mr. Jaitley.
#
We had written a small paragraph on an insolvency bankruptcy code for India.
#
Mr. Jaitley, of course, knew this inside out.
#
He, as a lawyer, was aware of this.
#
He was also closely associated with this global body called Insol International.
#
And he had a good intuitive sense of it.
#
And I think he naturally sort of came to the same conclusion.
#
He said, allow me to check this.
#
This is a politically sensitive matter.
#
And this will sound like you are allowing fat cats to get away with misdemeanor.
#
Indian labor will be put into difficulty.
#
I will check and tell you.
#
He came back and said, no, it didn't really fly.
#
PMO said, no, sir, in the first budget,
#
we don't want to sound like we are too much in favor of the big guys.
#
So then I wasn't going to give up easily.
#
So I said, sir, suggestion.
#
A MSME-friendly insolvency bankruptcy framework.
#
He said, yeah, I like this formulation.
#
So it sounds like we will make it easy for the small guys when they fail.
#
He said, yeah, exactly.
#
Came back next morning, beaming.
#
So give me a paragraph.
#
So we wrote a paragraph, an insolvency framework,
#
MSME-friendly, et cetera, et cetera.
#
We put in the budget speech.
#
It got cleared by the hierarchy.
#
Mr. Jaitley read it out.
#
And typically as is done after the budget,
#
literally the next day, you call out paragraphs
#
and start parceling them out and sending them to ministries,
#
saying, sir, this is your subject.
#
And next year, we have to give an action taken report on the budget.
#
So many of them will require legislation.
#
So you need to start right now.
#
So as AS in the ministry, additional secretary in the ministry,
#
I called out this paragraph and got Mr. Jaitley's approval,
#
send this to Ministry of Small and Medium Enterprises.
#
So the governmental mechanism, we wrote a letter,
#
what's called a DO letter, demiofficial letter.
#
Dear Mr. Madhav Lal, he was secretary MSME.
#
He sent off the letter.
#
Oh, there's a massive reaction.
#
Mr. Madhav Lal called me and said, what do you think?
#
How did you put this paragraph in the budget without asking me?
#
I am the secretary of MSME.
#
I will have nothing to do with this.
#
So he said, sir, budgets are not discussed with individual secretaries.
#
There were briefing meetings where you had suggested some things,
#
some of which have found their way into the budget.
#
But the budget finally is the prerogative of the finance minister,
#
the PM and the cabinet.
#
So I don't negotiate budget with individual departments.
#
I am not even privy to what finally goes into the budget.
#
But if you have a strong view, is that I have a very strong view.
#
I've also conveyed it to Mr. Jaitley.
#
So I went back to Mr. Jaitley with the file.
#
He said, we are in a problem.
#
I said, no, sir, we are not in a problem.
#
I said, sir, you are a lawyer.
#
Can you have a framework which is like a company's act exclusively for MSME?
#
Because the governance framework, the audit framework is for all companies.
#
So insolvency also has to be for all companies.
#
He said, you are cheating.
#
You are bringing back your old paragraph.
#
I said, he wrote it down.
#
So you can check again.
#
He went back, came back and said, yes, he agreed.
#
So we converted that paragraph.
#
Even today on record, the paragraph is about MSME.
#
We wrote a note explaining why constitutionally it will be violated
#
of Article 14 if you do only for one category,
#
which is not distinguishable from the general category.
#
Wrote in English to say, we must have a general framework.
#
He got it approved, came back and said, do it.
#
Now we said, we can't do it.
#
Now I remembered T.K. Vishwanathan Saab, former law secretary.
#
Mr. Jaitley was very fond of him.
#
He used to be Jaitley's law secretary.
#
He was also Mr. Jaitley had worked hard to make him Secretary General Lok Sabha.
#
Wise, very knowledgeable man.
#
We said, you have to head the committee.
#
Jaitley said, excellent name.
#
I can't ask for anything better.
#
Then we said, sir, we don't have the capability.
#
We need some external partners.
#
He said, yeah, do what you need.
#
So we got NIPFP and IGIDR involved because they had done,
#
Ajay and Susan had done enormous work on this.
#
But we felt that we also needed some legal knowledge.
#
So Vidhi, which is another, you know, excellent think tank.
#
Argo, Argya Sengupta, head of Vidhi.
#
And Mr. Jaitley, it turns out, was an old mentor of the founders of Vidhi.
#
He said, you've really found good people.
#
So we constituted the team.
#
And in exactly two meetings, we had the bulk of the IBC ready.
#
Mr. Vishwanathan led it from the front.
#
Susan and her team did enormously backbreaking hard work.
#
And Vidhi and team kept translating all of this into great economics knowledge,
#
getting translated into legal drafting.
#
Mr. Vishwanathan, former legislative drafting secretary, former law secretary.
#
So in exactly two full meetings, we had completed the bulk of the work.
#
But that's when I left the ministry.
#
And it became law later.
#
And the government decided that we should ideally,
#
since this is an accompanying law, quote unquote, with the Companies Act,
#
we should house this in the Ministry of Corporate Affairs.
#
But it was in another of those, you know,
#
what is said by a lot of people about how do reforms happen?
#
When you get the opportunity, you may not be ready.
#
And these opportunities are typically small windows.
#
We got a window when Mr. Jaitley said, PMO maan gaya hai, MSME ke liye framework banao.
#
And we got another small window when he came back and said,
#
Mr. Madhav Lal is not ready.
#
You guys need to run with it.
#
We said we can't run with it if it's MSME.
#
You need to generalize it.
#
He also took the sort of small window, converted it into a door.
#
But when you are at the door, you can't now start thinking from ground zero,
#
because then it will take you years.
#
And this window and the door may not be open for long.
#
It helped that Susan Ajay and team had deeply thought about this for many years.
#
It was lying in different papers.
#
All it required was put them together, reach out to the community that knew this,
#
validate it, and in a couple of months,
#
the last 15 years of serious economics gets translated into legislation.
#
So it tells us something about how does one do reform?
#
When the opportunity arises, you don't have the time to think.
#
So that's when youngsters ask me what is the advantage of these committees?
#
Why do you get committee reports which are not implemented?
#
Committee reports don't get implemented today,
#
but committee reports get dusted out and implemented when the window opens.
#
Politicians at that time are not willing to wait for months.
#
You need to give the answer now.
#
The windows are small, but those windows have to be seized with two hands.
#
So IBC was a classic example of prior work, small window,
#
which becomes a big door, and you get an elephant through that door
#
and get a legislative insolvency bankruptcy code.
#
This feels like a fantastic mirror of what happened earlier,
#
where I used to think the 91 reforms was all about we had a balance of payments crisis,
#
But what I have learned since is that more than a decade and a half of work
#
had actually gone into all the policy work that led to that moment.
#
The M document was there.
#
All the expertise was there.
#
All the reformers were there.
#
And this again seems similar, that it is not that the opportunity is there,
#
but all the work has been done.
#
And it reminds me of this great quote by Abraham Lincoln,
#
where he says, give me six hours to chop down a tree,
#
and I will spend the first four sharpening the axe.
#
And for me, this is an invaluable life lesson for all of us as well.
#
It's not just about policy, that we need to sharpen the axe anyway,
#
whether we ever get to chop a tree down or not.
#
I completely agree with you, Amit.
#
So let's sort of talk about the next great policy that you worked on,
#
in a sense, inflation targeting.
#
And like you mentioned about the other policies and a lot of reform,
#
it was many years in the making.
#
It's not as if it somehow happened suddenly and so on and so forth.
#
So give me a sense of what the thinking was around that
#
and how it gradually fructified and came into being.
#
My first direct exposure to the inflation targeting central bank
#
was in the context of the Parsi Mystery Committee report.
#
I mentioned it earlier.
#
I think it is the 2005 budget speech that had mentioned
#
the possibility of Mumbai being an international financial centre.
#
And it talked about how well located India is in terms of time zones
#
and sort of potentially given mathematical IT accounts as strings of Indians.
#
And the fact that a lot of the global financial sector was indeed manned by
#
former Indian bankers may not have worked in India,
#
as in people of Indian origin.
#
So the idea that got announced, and this is before my time,
#
was there is a good possibility of Mumbai becoming an international financial centre.
#
It will require policy changes and to examine and recommend to government
#
what are the requirements for Mumbai to become an international financial centre,
#
there will be a committee.
#
By then I had joined and this was housed in the capital markets division.
#
So I ended up becoming the member secretary of the committee,
#
headed by Mr. Parsi Mystery.
#
The committee did not take a narrow meaning of Mumbai as international financial centre.
#
Its primary argument was Mumbai currently is the head
#
or the sort of major financial centre in India.
#
And India has to become the centre of gravity of a lot of financial activities.
#
And automatically all of that or a bulk of that will happen in Mumbai.
#
And for this to happen there is a large urban development,
#
infrastructure, ease of living type, you know, pieces of action for Mumbai city.
#
But far more important is the international financial centre related legislation.
#
India needs a financial regulatory framework,
#
which will enable it to become an international financial centre.
#
So that's the context in which I began to understand, you know,
#
the role of central banks because my regular capital markets division
#
was focused much more narrowly on securities market.
#
I was member secretary of something called the High Level Coordination Committee
#
on Financial and Capital Markets.
#
It's a committee that used to be chaired by the governor of the RBI.
#
The joint secretary in charge of capital markets used to be the member secretary.
#
All the regulators were members.
#
The government was represented by the finance secretary.
#
And it would take up inter-regulatory coordination issues.
#
So to that extent one had familiarity, not great in-depth knowledge,
#
but familiarity with non-security market issues.
#
But the first serious, you know, sort of in-depth understanding of this notion of a central bank
#
with clearly defined objectives, which is not conflicted.
#
Conflicted as in multiple objectives that sometimes are in conflict with each other,
#
making the design somewhat difficult for the central bank itself
#
and diffusing the accountability of the central bank etc.
#
is something that I understood in the course of this committee deliberations.
#
One of the recommendations of the committee was India should move towards an inflation targeting central bank.
#
This got reiterated subsequently by the Raghuram Rajan committee.
#
And that again wasn't the central focus of the Raghuram Rajan committee.
#
It did refer to the central bank being more focused,
#
an organizing principle for the central bank and inflation targeting got mentioned.
#
Subsequently, the FSLRC headed by Justice Srikrishna went into this question
#
in terms of what are the legislative changes required to bring this about.
#
And as part of the Indian financial code, the FSLRC recommended some stuff on inflation targeting.
#
So that's the kind of background when this issue got highlighted in the post-Lehman phase
#
when you will recall we had flooded the Indian economy with enormous amounts of liquidity
#
and all of that liquidity began to wash ashore.
#
And as a consequence, inflation was already beginning to be a problem.
#
So when I landed back in the Ministry of Finance in 2013 as an additional secretary,
#
inflation was already a serious potential political election issue.
#
It was an economic issue and there was a lot of concentrated attention on what needs to be done.
#
So in that sense, it's similar to the IBC example that we gave.
#
Here is an opportunity to do something about a reform
#
because the circumstances are now sort of driving us towards an inflation targeting central bank
#
which notwithstanding expert committee recommendations was constantly and continues to be opposed.
#
When we are speaking about 2013, it continues to be opposed by the central bank itself.
#
Ironically, now by the very governor who had recommended inflation targeting central bank, namely Raghu.
#
We were asked to start examining the possibility.
#
Ela, who was principal economic advisor, did a lot of the economic reasoning
#
and it had to be anchored in a division of the government.
#
So it was sparked in the division that I was part of.
#
So the two of us sort of worked on the files and closer towards March, April 2014,
#
we got an in-principle decision on file from the then FM, Mr. Chidambaram,
#
that this is something we need to work on.
#
He clearly felt it can't be at the cost of growth
#
because he still believed that monetary policy actions can have an impact on growth
#
and Ela's constant efforts at pointing out that it's only short term
#
that there is a growth versus inflation issue.
#
In the longer term, inflation is the cause of low growth
#
and therefore there is complete clarity in macro that the monetary policy can only focus on inflation.
#
It should not focus on growth.
#
Mr. Chidambaram disagreed and he wanted a formulation which sort of somewhat married the two
#
without diluting the focus on inflation targeting for the central bank.
#
So to cut a long story short, we agreed on a particular formulation
#
including the formulation as in what should go into the Reserve Bank of India Act.
#
And the FM said this is something that the PM understands much better than all of us
#
and he'd like to get it cleared by the PM.
#
And he went and had a couple of discussions and the PM had suggestions.
#
Those were incorporated and Mr. Chidambaram sent the file back to us recording all of this.
#
He was meticulous when it came to these kinds of very lawyer-like, very old style.
#
I had a discussion of the PM at 7.20 PM this evening and this is what transpired.
#
So the file came back with a very interesting observation.
#
He said we are in March-April 2014.
#
It must have been maybe February-March. I could be getting the months wrong.
#
And very soon India will have a new government.
#
This is a serious and sort of a game-changing economic policy.
#
So we should not do anything with this at this stage. We should not go public.
#
This should remain on file.
#
It'll have great persuasive value whoever comes to power.
#
And it should be put up to the new government for a decision.
#
Explicit recording of this.
#
The file came back and when the new government took charge,
#
if you remember, inflation was an important part of the narrative.
#
And the new government was clearly in favor of doing something about inflation.
#
They had not explicitly said anything about an inflation targeting central bank.
#
But clearly this was high on the political agenda.
#
So Mr. Mayaram and I went to Mr. Jaitley and said this could potentially be in the budget.
#
So Mr. Mayaram explained and he said, okay, please put up the file.
#
So Mr. Mayaram asked me and we put up the file.
#
And Mr. Mayaram I think had gone to Jaipur.
#
I got called the next day and Mr. Jaitley sort of said, I've approved the file.
#
I was a little surprised.
#
I thought this is an issue which requires a lot of deliberation.
#
And it's a politically significant issue.
#
So I looked, I must have looked, you know, skeptical and hesitant.
#
He sort of looked very quizzically at me and somewhat slightly irritated.
#
So I said, sir, it's a serious issue.
#
And, you know, you need to maybe deliberate with other political colleagues.
#
So I think he got the impression that I am doubting his understanding of the issue.
#
And he said, just tell me one thing, monetary policy or monetary policy framework.
#
You know, these are the two phrases that occur in your notings.
#
So I very briefly explained.
#
He said, yeah, it's fine.
#
So this formulation is also fine.
#
I said, sir, it's a very serious announcement because you're fundamentally altering the mandate of the central bank.
#
And it has political implications besides economic.
#
And his answer stunned me.
#
I have not shared this answer with many people.
#
He said two of India's finest political, legal and economic minds have come to the conclusion that this is good for India.
#
I don't need to go beyond this.
#
Whatever be our differences, these are people who know this subject better than almost anybody else in India.
#
So there is no need for further validity.
#
And incidentally, I have gone and discussed it with the PM.
#
I have not sent the file and the PM completely agrees that whatever needs to be done for not only controlling inflation today,
#
but putting in place a sustainable inflation controlling framework is good for India.
#
So I've told him that I'm not, you know, boring him with the details of which formulation, which section of the RBI Act.
#
So he sort of told me, be assured it's got the consideration it deserves.
#
It's not a casual decision.
#
So it took a little while because the governor massively pushed back and almost made it a prestige issue.
#
Prestige issue is what I understand because I left the Ministry of Finance.
#
So it in that year, it became an agreement between the government and the RBI.
#
And I think it was some kind of a face saving.
#
The governor's view is something else.
#
So we'll give him a via media this year.
#
In the meanwhile, Raghu appointed or you know, Raghu probably had appointed a little earlier,
#
Anurjit Patel committee got the almost identical recommendation coming from his own deputy governor.
#
So I think the messaging was that we ourselves, the RBI has concluded that we need inflation targeting.
#
So it's not government.
#
It's not some external person who's deciding.
#
I think this was what he was trying to do.
#
Though to my mind, constitutionally, this is, you know, this is silly.
#
The legislations are not done by the agencies which implement them.
#
Legislations are done by parliament and agencies can have inputs.
#
But legislations are moved by government and it's the political executive which clears it.
#
And it's the parliament which sort of finally approves it.
#
But I think Raghu wanted a face saver.
#
Exactly the formulation that we had moved on file and got approved became the law.
#
And I think it's a path breaking, serious reform.
#
And again, it's a testament to the power of ideas.
#
2007, Ajay and I would have been a minority of two in India to publicly talk about inflation targeting.
#
And people would almost laugh at us saying, do you guys know your macro?
#
Do you guys know India?
#
You guys must be, you know, we can go back and smell the coffee that you're drinking.
#
Was the kind of reaction.
#
And we were at that time trying to socialize the Persimistry Committee report.
#
So we would go around talking, you know, formally doing presentations on the Persimistry Committee report.
#
We had conversations with senior journalists, former central bankers, academic institutions, chambers of commerce and found almost no traction.
#
And ironically, what is heresy in 2007 slowly becomes consensus by 1415.
#
And, you know, this process of converting an idea and making sure that you are ready with all of the implementation toolkit when its time comes is again another example of public policy reform actually being carried out.
#
This is such an inspiring story, especially Mr. Jaitley's reference to Manmohan Singh and Mr. Chidambaram as, you know, two of the finest minds.
#
And it also reminds me, if I'm not mistaken from what I remember, even during the NPS time, the Vajpayee government realized that there is another government coming in.
#
So they chose to leave that decision for the next government.
#
Am I remembering it correctly?
#
I do not know the details of that, but clearly in times of timing, the decision on pension reforms for civil servants,
#
which is the difficult decision because you're dealing with something which is vested.
#
You're not depriving current civil servants of defined benefits pension.
#
But a generation of civil servants who've been on defined benefits pension and therefore the incoming generation of civil servants assumes that this is the way civil service is always structured,
#
gets a root shock in 2003 when prospectively the government announces that we are moving away to defined contribution pension.
#
It's a serious decision.
#
There is also a decision that we should make a market based social security for old age income security, more correctly,
#
available not only to the organized working population, namely government servants, industrial workers, even a self-employed person,
#
or enable a person moving from job to job to carry the equivalent of a 401k of the US, a pension that moves with you and is not tied to an employer requires a legislation.
#
So the Vajpayee government clearly realized it.
#
If I recall right, they issued an ordinance, but seeing that the elections are coming, they let the ordinance lapse and did not renew it.
#
So when in 2004 the the UPA government came, there was an administratively constituted PFRDA.
#
There was a government servant new pension scheme because that could be done without legislation.
#
That's only changing terms of contract of employment between government and its employees so that you could do without a parliamentary legislation.
#
But to have a full scale regulator in place, you needed a parliamentary legislation.
#
But 2004 onwards, the UPA tried and it couldn't get the legislation done till 2014.
#
It eventually got done good 10 years later and we've discussed the sort of travails of the pension legislation.
#
But yeah, my guess is it must have been somewhat similar and there was continuity.
#
The new government completely sort of went along with whatever had been decided by the Vajpayee government
#
because I think there was an unspoken consensus that the fisc was in serious risk if you didn't contain the unfunded pension liabilities of civil servants.
#
Fisky business. I'll of course link my episode on pensions with Ajay and Renuka Sanay in the show notes as also my episode with Ela where I remember she mentioned inflation targeting as well.
#
For those of my listeners who may not quite be aware of monetary policy or what inflation targeting is,
#
let's demystify a bit. Tell me if I'm paraphrasing correctly that essentially one of the key tools that the central bank has is interest rates.
#
And when it lowers interest rates, what it is effectively doing is printing money or increasing the money supply.
#
And when the money supply goes up, as we know now, inflation happens, prices rise because there is more money supply in relation to the goods and services that are out there.
#
And the danger of just printing money indiscriminately is that then there can be rampant inflation.
#
Like in the case of Germany after World War I, there was rampant hyperinflation because they had to print so much money and everything went out of whack.
#
And that changed their society, their politics and eventually led to the Nazi party coming up in the Second World War.
#
So inflation is super dangerous, but it also becomes really difficult to pull it off in the political economy
#
because every government likes to have interest rates as a tool which they can use.
#
You know, you want to make it seem as if there is a spurt of growth in the economy.
#
Lowering interest rates is a great way to do so. So is that a correct sort of summation?
#
That's conceptually a good formulation, except in the modern context, you won't necessarily use the phrase printing of money.
#
It is effectively there is an increase in the liquidity in purchasing power in the system which stimulates demand.
#
And increasing demand temporarily looks like a good thing.
#
People apparently have more money to spend, but if we have more money than goods that are available, services that are available,
#
there is demand running ahead of supply and therefore prices going up.
#
So in essence, it's exactly what you said.
#
And historically, this has been shown and we discussed this in one of the earlier questions.
#
Very often, reform is about politicians understanding the long term consequences of their actions.
#
And in an act of enlightened self-interest, instituting self-restraint,
#
I need to have the ability to say, I'm sorry, I can't do this.
#
But I have consciously created a mechanism where I have given up this power.
#
So if the Reserve Bank of India or a central bank is formally or informally acting on the instructions of government
#
and government had the lever of interest rate, the argument goes that every government on the eve of an election
#
or nine months before an election, one year before an election, they'll figure this out,
#
will use this as a lever to increase the demand in the economy,
#
create a sense of apparent prosperity and hope to be voted back to power.
#
This will in turn cause a whole lot of harm, which is for them or for their successor actually very difficult to control.
#
You can go through this game once, you can go through this game twice.
#
Everybody gets hurt in the process.
#
There is an incumbent government which gets thrown out because of inflation.
#
There is a new government which is struggling and spends the bulk of its term trying to control the inflation that it inherited.
#
And they both realize, since this is a repeat game, it's not in the interest of either of us to create inflation
#
because eventually no one benefits and people are seriously harmed in the consequence.
#
So there is this unspoken compact which develops and this is how it got developed in the rest of the world,
#
unspoken or spoken compact that we tie our hands by creating an independent central bank.
#
So the argument for an autonomous, independent central bank narrowly can be justified only for monetary policy.
#
And Ajay would go to say, monetary policy is only one thing.
#
It's the short-term rate of interest fixation by the central bank,
#
which is the rate at which it will accommodate all its regulated entities.
#
It will lend money at that rate to a bank in plain English.
#
This is the only area where conceptually, in economic terms,
#
there is an argument for a completely independent agency outside of the government.
#
But the moment you talk about an independent agency, it needs to be accompanied by accountability.
#
And hence, an inflation target and a mechanism where the central bank needs to come and explain
#
why it is not being able to meet the target and what needs to be done, etc. etc.
#
So all of the good stuff.
#
So the target, in other words, both keeps it independent and accountable.
#
It's independent because this is the one mandate is going to do what it takes to adjust the interest rate
#
and meet the inflation target and accountable because it has to do that.
#
And that is the only mandate and you can judge it according to that.
#
Exactly. And independence inasmuch as you create a mechanism,
#
it could be the central bank itself, it could be a monetary policy committee.
#
India chose a monetary policy committee and the argument is simple.
#
It's like the chief election commissioner.
#
It's like the bench in the Supreme Court.
#
Three minds are better than one mind.
#
Five minds are better than three, but there is some optimal number that you reach.
#
But those five minds are not government minds.
#
So typically in no monetary policy committee, is there a serving government servant?
#
They are nominated by the government because the appointment process is by the government.
#
But typically they are not civil servants.
#
And there was a time when Arvind Subramaniam, a CEA, felt that there is a government viewpoint
#
and the government viewpoint needs to be heard.
#
So some countries have a nice mechanism.
#
I think the UK, which has a non-voting member from the government whose mandate and role is
#
he or she will go and explain to the monetary policy committee the government's viewpoint on the economy.
#
And I think that's a good model.
#
But the decision, the moment government is part of the decision, you are diluting the independence,
#
but you are also diffusing the accountability.
#
So the design has to preserve the operational independence of this mechanism.
#
And the moment you've given operational independence, you concomitantly put an accountability mechanism
#
saying we've given you this massive power to set short-term interest rates.
#
You have a machinery which works out, you know, likely inflation scenarios, etc., etc.
#
And then you guys and you as a group come to a certain conclusion.
#
And if your actions are turning out to be ineffective, the public and the parliament needs to know why, what went wrong.
#
So in that mechanism, we've gone 50%.
#
We haven't gone the entire sort of distance.
#
There is a report that the RBI sends to government to explain its failure to meet the target.
#
And this happened some time ago, if you recall, six continuous quarters, the RBI did not meet the target.
#
And there is a periodicity fixed in the act after which the RBI has to explain in a formal communication to the government
#
that communication is not in the public domain.
#
The government did not place it in parliament.
#
So to that extent, in my personal opinion, the accountability has got a little fuzzy.
#
We need to make this public.
#
The RBI's explanation to government ideally should be tabled in parliament and parliament should get a chance to discuss it.
#
And that's in a democracy and a constitutional democracy like ours.
#
That is the final, I think, piece of agency accountability to the people.
#
And the governor of the RBI now is Shaktikanta Das, right?
#
He was finance secretary at the time of demonetization.
#
Is it an issue that someone who was working in the government then goes on to become governor of the RBI?
#
Can there be questions raised about its autonomy and so on and that kind of situation?
#
Actually, if you look at the history of the Reserve Bank of India, a bulk of the governors have been civil servants.
#
Most of them have been finance secretaries, secretary of the Department of Economic Affairs.
#
It's very rarely that an external person, Raghu Urjit would be recent names that we recall.
#
Dr. Vimal Jalan may not have been a serving civil servant,
#
but he spent so many years in the government that other than formally being in the IAS,
#
you could say he was, in a sense, an insider.
#
A person, originally an external economist inducted into the government,
#
but having spent long years in the government to be able to understand the paradigm of government,
#
how does it work, political compulsions, he was secretary of banking, he was secretary of DEA,
#
he was chief economic advisor, so he knew the governmental system.
#
So, there have been really very few complete outsiders to the system.
#
Urjit had been earlier in government, very short stint, and had done short stints in the RBI.
#
So, there is one gentleman who, I think, came from the LIC.
#
This was during the emergency.
#
One gentleman, Talwar or some such name, I don't recall, he was governor RBI.
#
Other than that, a bulk of them have been civil servants.
#
And they haven't really been found, quote-unquote, wanting in the independence part.
#
Often, my sort of senses, they were not, you know, the sense of independence was actually misplaced.
#
Finally, this is an agency which needs to be accountable.
#
There are writings that I'm reading.
#
She may have been in your show, I'm not sure, Bhargavi.
#
Bhargavi has done a lot of work on central bank and legal frameworks of central bank, a comparative study.
#
She points out in one of her fascinating recent pieces,
#
the fact that one of the few agencies whose annual report is not placed in parliament is the RBI.
#
I'm not talking about the Monetary Policy Committee report.
#
Any public agency in India, whether it's SEBI or National Gallery of Modern Art, Sangeet Natak Academy,
#
they are all public agencies.
#
And if it's a public agency, the eventual accountability is to the people of India through the parliament.
#
So their annual reports get placed and they get discussed.
#
In the case of RBI, any attempt at placing the annual report in parliament and having it discussed
#
has met with deep resistance and successful resistance.
#
Now, in my opinion, this is not independence.
#
In my opinion, this is anarchy because institutions eventually have to be responsible
#
and that independence is for a purpose.
#
The purpose being you have to fulfill ABCD objectives for the people of India.
#
But the people of India have to know, did you actually fulfill these objectives?
#
So I would not entirely agree with the statement that you made
#
that we have found them wanting an independence.
#
I think it's, if anything, I would think it's the other way.
#
There has been, they've been rather mulish, in my opinion.
#
Currently, I didn't make a statement. I asked a question.
#
But the Bhargavi we are referring to is, of course, my good friend Bhargavi Zaveri.
#
She hasn't been on the show yet, but I'll make sure she is at some point.
#
She has a radical roadmap for reform, which cannot be revealed in public yet.
#
Alas, I don't know if she's told you in private.
#
Otherwise, I'll tell you after this recording.
#
But we will all get lynched if I say it aloud here.
#
Tell me about your time after this, you know, in the skills ministry.
#
And I'm also a little curious about, you know,
#
what that period you've described of maybe 10, 15 years before this,
#
you're doing incredibly consequential things.
#
Inflation targeting only being the last of them, but working on NPS before that,
#
fixing the 2008 crisis before that,
#
or, you know, working with the finance ministry during that time.
#
And it would almost seem like a sideways move,
#
just, you know, going to a narrowly focused ministry and so on and so forth.
#
But the little that I've heard you speaking about that time,
#
including earlier in the show, you've done so with enthusiasm.
#
So tell me a little bit about your time there and what it was like.
#
So I moved out of the Ministry of Finance in 2014, October.
#
That move was to sort of quote you an even more sort of sideways move.
#
It was to a department called the Department of Land Resources,
#
which is part of the Ministry of Rural Development.
#
And land is a list two subject,
#
as in the seventh schedule of the Constitution distributes subjects
#
between the union, the state, and some in the concurrent list.
#
Bulk of land is in the state list.
#
So there is this paradox of a large number of ministries in the Government of India
#
on subjects that are formally allotted to states.
#
So it's not something which is easy to explain.
#
If this is a subject on which the Government of India has no power of legislation,
#
and long years ago, the Supreme Court in a very famous case called Ram Jawa Kapoor
#
versus State of Punjab had said the executive power of the union
#
and the legislative power of the union are concurrent.
#
Meaning, if you don't have legislative power,
#
you obviously don't have executive power on the subject.
#
So on land, why should there be a Ministry of Land is not something
#
I was able to sort of figure out till I landed.
#
And once I landed, it was clear the mission creep of agencies was sort of writ large on that ministry.
#
The department got created maybe about 12 years or 10 years before I landed there.
#
And it then began to create a Government of India scheme on land titling.
#
Government of India scheme on land records modernization.
#
Now, for it to become relevant, it requires a relatively small amount of money
#
compared to the size of the Government of India budget.
#
But that small amount of money is a very large amount for a state land revenue department.
#
A state land revenue department is not exactly the most glamorous department.
#
And it doesn't often have serious funding from its finance department.
#
So the Government of India land resources department is now mana from heaven.
#
Here is this new pot of money.
#
And then it's in the interest paradoxically of the State Department of Land
#
to make sure that the Government of India Department of Land is important.
#
Because its own importance is increasing because the Government of India Land Department
#
is giving this guy, the state guy, money.
#
So it's classic mission creep expansion of regimes and territory.
#
It was doing some additional stuff like wastelands development,
#
which originally was with the Ministry of Environment and Forest
#
and in a body called the National Wastelands Development Board.
#
So out of thin air, this ministry had been created.
#
And once created, ministries will find a purpose.
#
Apart from these, the only other thing that the Department of Land Resources was doing
#
is the now famous Land Acquisition Act.
#
And this was sort of a hot potato, if you remember,
#
after the special economic zones of 2007-2008,
#
there was serious pushback saying exercise of sovereign power
#
for acquisition of land for private, for-profit entities
#
and at a fraction of the market cost doesn't look correct,
#
There was serious pushback.
#
And during Mr. Jayaram Ramesh's time as Minister of Rural Development,
#
work started on a new Land Acquisition Act.
#
And it's a long name, Right to Fair Compensation,
#
It got passed in the last year of the UPRAG.
#
And it was a unanimous legislation.
#
Namely, Madam Sumitra Mahajan,
#
who subsequently became Speaker of the Lok Sabha in 2014,
#
as the Chairperson of the Standing Committee of the Ministry of Rural Development,
#
made sure that the bill that the government had moved,
#
on which the opposition had some objections,
#
she actually actively worked with the government and crafted a compromise.
#
So the bill that got passed in 2013-14 was a unanimous,
#
by definition, compromise legislation.
#
So the Act was in place.
#
And that Act was also administered by the Department of Land Resources.
#
And if you're wondering why I've gone into this long explanation,
#
a part of the answer is sort of in answer to your question on moving sideways.
#
Because when I landed in the Department of Land Resources,
#
my then Minister, a very fine gentleman, Rajiv Pratap Rudi Sahib from Bihar,
#
he was the Minister for Skill Development.
#
So when I landed in Skill Development,
#
and I was about to take charge and he invited me for a cup of tea,
#
and we were sitting and chatting.
#
He was a friendly type of person.
#
He said, Krishnan Sahib ek baat bataiye.
#
I have not known you, but we know of each other.
#
You know, we have common friends.
#
His elder brother was my batch in the police.
#
So he said, you've spent a lifetime in finance.
#
You did interesting stuff in the state government.
#
And then Government of India, you were doing all of this.
#
Why did the government, and it was his government,
#
so it was paradoxical that he was asking me,
#
why did the government shift you to the Department of Land Resources?
#
My answer took his breath away.
#
In fact, took my breath away.
#
I didn't realize I was capable of this kind of a smart, elegy answer.
#
I said, sir, when the new government came in 2014,
#
what was the biggest challenge for them?
#
The biggest challenge was land acquisition.
#
And it was, if you remember, a serious political issue,
#
outer sort of Delhi Constituency, besides, you know,
#
and there was the counter pressure, namely,
#
land acquisition has now become impossible.
#
Because the compromise legislation has so massively increased
#
the role of the state, the transaction cost,
#
that no land is getting acquired.
#
Infrastructure will suffer, is one narrative.
#
And the opposite narrative is people are getting shortchanged
#
and private industrialists are benefiting.
#
So it was a serious hot potato.
#
So it was in that context I told him,
#
that what was the most important problem in front of this government?
#
So the government thought,
#
they will put the smartest civil servant in the biggest challenge.
#
So I sort of gave this answer.
#
Rajiv Pratap Rudi sir looked at me.
#
He said, who is the politician here?
#
So I said, no, sir, when the senior civil servant is made,
#
the politician-civil servant distinction seems to have ended.
#
So that was my sort of more flippant explanation.
#
But notwithstanding the fact that this is a state subject,
#
if you are a public policy junkie,
#
you can find interesting stuff even in the SEEDS Corporation.
#
Because there is no part of government that is unexciting
#
if your interest is public policy.
#
So Digital India Land Records Modernization Program
#
and this Land Acquisition Act,
#
we did the ordinance which then finally was allowed to lapse.
#
So it was fascinating because this is not a subject I had done
#
after having been district collector, which is 89-90.
#
So, yes, not as glamorous as finance,
#
not as sort of newspaper headline stuff,
#
but it in a sort of direct sense touched more Indians
#
than finance ever would.
#
So if you did some serious land-related reforms,
#
it would touch far more sort of of India than finance.
#
I thoroughly enjoyed my work.
#
I can't say my mind was not in finance,
#
but I wouldn't also say that I terribly missed finance.
#
This is exciting enough.
#
And then skills was an altogether different subject
#
because this is a concurrent list subject.
#
And I think if you are constitutional, if you are cerebral,
#
you can actually see the larger picture of each subject.
#
So the other rationalization,
#
because Mr. Rudy was still my minister when I landed.
#
I was drinking tea and talked to him.
#
So I said, sir, your question about the land at that time,
#
But I have a more complete answer now.
#
I said, sir, you have been a student of economics.
#
What are the four factors of production?
#
Land, labor, capital and entrepreneurship.
#
I started life in government of India with capital.
#
Your government was kind enough to move me to land.
#
And what is my new ministry?
#
It's called the Ministry of Skill Development and Entrepreneurship.
#
So I've now got labor and entrepreneurship.
#
So I'm the complete economist.
#
The four factors of production,
#
capital, land, labor and entrepreneurship,
#
at the senior policy level,
#
in the government of India,
#
I'm getting a chance to see them.
#
So if I think you can bring a larger dimension to these questions,
#
each of them is exciting in its own right.
#
So honestly, skill development and entrepreneurship is fascinating
#
because it is a new ministry.
#
And it had no standard operating protocols.
#
So in a sense, you are like in a startup.
#
So it's important that you seriously then shape the DNA of that ministry
#
because these ministries will last.
#
Ministries seldom get abolished.
#
And I told you briefly about the creation of the National Council
#
for Vocational Education and Training.
#
All of that was thanks to my prayer grounding in regulation,
#
design of regulatory organizations,
#
and looking at the larger picture of a national labor market,
#
the need for arms length certification,
#
which can create verifiable credentials for labor
#
and labor mobility becomes very critical.
#
So skill development, which is good three, three and a half years,
#
We, I think, managed to sort of move this Titanic
#
in terms of explaining to the political hierarchy
#
that government of India's strength is the money that it brings to the table.
#
But this is very intensely local.
#
Vijayawada will require something,
#
which is very different from what Kamaroop in Assam will require,
#
very different from Shravasti in Uttar Pradesh.
#
So one size fits all in skill will be disastrous.
#
So we should delegate more and more to the states.
#
I didn't entirely succeed,
#
but I think it's one of those reform ideas whose time will come.
#
We've created all the groundwork in terms of documentation, thinking,
#
and a whole generation of civil servants who agree with us.
#
So a lot of the frameworks got created.
#
And in government of India terms,
#
the other major symbol of effectiveness is your own building.
#
So the Ministry of Skill Development and Entrepreneurship
#
has now a new Kaushal Bhavan.
#
And guess where it is? In Chanakya Puri.
#
So even for government of India to be able to persuade Ministry of Urban Development
#
to part with that hidden one and a half acres of land in the absolute heart of Delhi
#
and creating a building,
#
which the foundation stone was laid by Mr. Venkaiah Naidu,
#
who is the vice president of India.
#
It's, I believe, going to be occupied soon.
#
So this is perhaps in an institutional sense not a great achievement,
#
but if you're talking about various aspects of a startup,
#
I think it's a ministry which has sort of come of age
#
and skill development was as much fun as any other ministry.
#
I love your positive and diplomatic answer to Mr. Rudy's question.
#
What's the real answer?
#
The real answer in terms of why was I shifted?
#
I assumed, you know, all governments have their own views on who should man key posts.
#
These finally, at the higher levels, go beyond competence.
#
They clearly belong to the area of trust.
#
And I honestly think it is the chief executive's prerogative on who would constitute his team.
#
And I think it's entirely correct in a democracy that the person who's finally accountable for outcomes chooses his team.
#
So if Mr. Modi and his team believed that they need a finance secretary of ABC sort of attributes,
#
I think it's entirely his prerogative.
#
And remember, we spoke earlier about this sense of inclusive.
#
I think there was also a feeling that there had been too much of networking.
#
You know, this is a bunch of old boys network, which was helping itself.
#
I personally think it is completely incorrect.
#
I didn't belong to any old boy network in that sense.
#
I'm from an ordinary lower or middle class family.
#
I had zero civil service connections.
#
And if I had a network, it was a network which is professional and which is entirely on account of what I would assume with my merit, my hard work and presumably my abilities.
#
But be that as it may, I genuinely think it's the prerogative of the hierarchy.
#
I do think or, you know, sort of I hold there is a certain, quote unquote, a sense of entitlement in terms of I worked hard.
#
I deserve to be additional secretary.
#
I deserve to be secretary.
#
That objective assessment of a person and making him or her a secretary to the government, I would still think is not too much in the sort of political discretionary domain.
#
And on that, the regime was entirely fair.
#
I had been empaneled additional secretary prior to this government.
#
I was empaneled as secretary when it was my due.
#
I was posted as secretary when it was my due.
#
And skill development may not have been finance, assuming that I had a desire for finance, but skill development was very high priority for this government.
#
And the fact that they appointed me to an area which is, you know, evidently of high priority.
#
And I think it's even objectively speaking, it's an area of great priority for India and left me undisturbed for three and a half years is something I value.
#
And I honestly thank the regime for that.
#
And I concede completely their right to appoint a person of their choice.
#
Though it's ironical, you know, in one sense, this regime kept talking about stability of tenure.
#
And if you see the first five, six years, India had five, six secretaries in economic affairs.
#
So it's not as if they had a person in mind.
#
I think they were also trying out and it's not an easy area.
#
If you've been entirely in the state, it's not easy to figure out what economic affairs does.
#
Expenditure is easy to figure out. Revenue is easy to figure out.
#
What economic affairs does, you know, this very vague notion called economic policy is not easy to figure out.
#
And I think the government also went through its motions. Now it's stabilized.
#
It's got secretaries who are now spending two, three years.
#
So I don't really have any sort of serious reservations or negative feelings on that.
#
There's a saying I love, where you stand depends on where you sit.
#
And from that, I would imagine that anyone who works in government, where they would stand would be in expanding the role of government.
#
You know, there's Parkinson's law where departments just expand and officers, you know, their incentives are towards expanding their power and their budget and so on and so forth.
#
And what I find remarkable about you and a bunch of other reformers like you within government going back a long way is that you sort of resisted this, that despite being part of the state,
#
there was skepticism of the state and that a lot of these reforms come from actually reducing your own power and giving, you know, more freedom to the people and so on and so forth.
#
And it seems like, you know, right from the late 70s when, you know, Montaigne comes back to India at Manmohan's urging and you have these individuals who are kind of banding together.
#
And 91 is a shining moment where they actually get to, you know, the crisis happens and they are ready.
#
They've been sharpening the axe for so many years.
#
And similarly for the next 20 years, that kind of continues.
#
And today I hear a lament in some circles that everyone who's left from that small reforms community, as it were, is sort of out in the cold, which might be a dramatic way to put it.
#
But that's sort of what I've heard in the sense that I've got that that sort of consensus for reform within the state has also dimmed significantly.
#
So I want to ask a little bit about that.
#
I think you'll probably disagree with the characterization in terms of being out in the cold.
#
But tell me a little bit about that community of people who, you know, bucked their incentives in a sense to band together for a common purpose and a higher good.
#
Tell me a little bit about that community of people.
#
I know, you know, you and Ajay are obviously part of that.
#
I've met a few others as well, and I'm always struck by the strong sense of public purpose.
#
You know, all your incentives are aligned differently, but you chose to be this way.
#
So tell me a little bit about what it means for you to be part of this band of people.
#
And where do you think that sense of purpose really then comes from?
#
Because where you stand is not where you sat.
#
Remember, you know, this generation that you spoke about, this community of reformers, bulk of them are products of socialist India.
#
In a sense, this community has experienced, lived through massive state failure.
#
So it's firsthand experience of, I've stood in Delhi milk scheme queues in the morning.
#
I've gone and stood outside Russian shops to buy, you know, rice and wheat.
#
And my generation has lived through this.
#
It didn't, at that time, one didn't know state failure, market failure, all of these notions.
#
But as in when one sort of got educated in economics and clearly periodically going back to sort of school
#
and getting reeducated was an important part of this evolution.
#
You then are able to understand your own lived experience of difficulties is actually explained by this larger paradigm.
#
And you can't solve this transactionally.
#
You need to solve this in a larger paradigm sort of policy sense.
#
And I think that's the strength and the experience of that reforming community.
#
I do disagree with your sort of description of out in the cold.
#
We've also lived out our times, you know, there is we all have our assigned roles and it's part of life that you move on.
#
The lament is not that we've moved on.
#
The lament is a whole bunch of failed, discredited, unworkable ideas are resurfacing, repackaged in newer language.
#
But in one sense, Atma Nirbhar is exactly what India tried and failed.
#
Now, I've heard my good friend and sort of somebody I like very much, Mr. Amitabh Kant,
#
going to great lengths to distinguish Atma Nirbhar from import substitution.
#
And I think there is actually no difference.
#
You can't be an infant industry or an infant economy for 60 years.
#
So if you got an opportunity to quote unquote grow behind tariff walls, we should have been world-leading superpowers.
#
So that's a completely failed idea.
#
So it is tragic to see, you know, this bit of history repeating itself.
#
And this had begun even before I left government.
#
I've sat in committee of secretaries meetings where I had to pinch myself to ask,
#
was I in a committee of secretaries of 1971?
#
Because the language that was being used was straight out of, if you remember,
#
there used to be an Indian economy textbook, one of those mug books called Duttan Sundaram.
#
It's a famous Delhi University textbook, which would describe Indian economic developments.
#
It's a descriptive book. It is not a very analytical book.
#
It actually looked like I was sitting in a Duttan Sundaram class on why we need licensing,
#
why scarce resources should not be frittered away in multiple brands of blade.
#
There are too many cassette recorders because music is music.
#
If you have one cassette recorder, it serves the purpose.
#
So this branding, Philips, Murphy, Sony, these are all capitalist exploitation of vulnerabilities of ill-informed individuals.
#
It's the kind of language you hear that is worrisome.
#
So the lament is not that we are out.
#
The lament is the substitution in the younger generation, part of it could be ignorance.
#
This generation may not have lived through the socialist India that we lived through
#
and therefore isn't entirely familiar with state failure.
#
But I suspect in addition, there is also serious self-serving considerations.
#
An expanded state means greater power.
#
So that old incentive of the missionary in a sense is sort of working its way back.
#
And in that sense, civil servants are actually cleverer than politicians think.
#
They will sell to the politician an idea that sounds politically attractive,
#
but fundamentally is good for the civil service.
#
It is not good for the people.
#
So this is public choice theory all over again.
#
And it is something I'm worried about.
#
What do you do these days?
#
Like what keeps you going?
#
What gives you purpose?
#
What do you look forward to?
#
So I am honorary research professor at the Center for Policy Research.
#
I decided after retirement, I spent a couple of years as a full-time,
#
I held a chair professorship in the National Council of Applied Economic Research.
#
And then I realized that I need freedom.
#
I need to be able to travel.
#
I need to, you know, I didn't want to be in a situation where
#
if tomorrow morning I felt like going to Chandigarh by Shatabdi,
#
I didn't have to seek, I didn't want to seek approval.
#
Dear madam, dear sir, I have to go to Chandigarh and for no ostensible purpose.
#
And please give me permission to go.
#
You know, one had done this for 37 years.
#
And one realized that if you are an employee in any institution, government or private,
#
this is part of, you know, that ecosystem.
#
So I have now in the last year and a half, I'm not an employee anywhere.
#
I work with the wonderful team in CPR.
#
Yamini, Mekhala, State Capacity Initiative team, Amrita Pillai,
#
a whole bunch of extremely smart, young, serious thinkers
#
and serious India sort of people who are, you know, core of their heart is India's development.
#
Very good intellectuals, Partho Mukhopadhyaya, Shyam Saran Sahab, a whole bunch of them.
#
So I, when I'm in Delhi, I try and spend my working day in CPR.
#
Other than that, I'm now, thanks to the fact that I'm not an employee anywhere,
#
I'm free to accept, you know, board advisory type positions.
#
So I'm on a couple of, more than a couple of not-for-profit institutions,
#
Public Health Foundation of India, Indian Institute of Habitat and Settlement, which is in Bangalore.
#
Then I help Ajay and Susan with the XKDR forum.
#
I am part of the governing council of a university in Chennai called Sai University.
#
It's one of the first, in fact the first, after 1930s,
#
Tamil Nadu had not created a legislative framework for a private university.
#
Sai is, I believe, one of the two. It's a challenge.
#
Building a university is far, far more difficult than building companies.
#
That's the sense I have got. So I'm associated with them.
#
And then I'm associated with a few, a few for-profit entities,
#
which also brings in sort of much required, you know, income, stability, old age income security, if you may.
#
So, and I travel, I come for conferences.
#
So as one of the conference participants put it today, connoisseur of leisure.
#
But there isn't much of it, but whatever is available in terms of leisure, a connoisseur of leisure.
#
Yeah, we are at the moment together in a conference, which is supposed to be top secret, so we can't name it.
#
My final question, like I'm really grateful you've given me so much of your time.
#
This has just been such a fantastic learning experience.
#
And I'll listen to this episode multiple times to try and process all of this.
#
My final question for me and my listeners, you know, recommend books, films, music,
#
any kind of art at all that you absolutely love and you love so much you want to share it with the world?
#
I hear a lot of Carnatic music.
#
I don't know how many of your listeners are interested in Carnatic classical.
#
I am very fond of instrumentals, flute, for instance.
#
There is a youngster called R. Shashank, Rudrapatnam Shashank, who plays the flute.
#
There is Mr. Ramani, Ramani who plays the flute.
#
And then there is another gentleman called R. K. Srikantan, who is a great singer.
#
I also listen to a lot of, they're not really podcasts, they are pravachans.
#
For instance, the Sringeri Pontiff, the Shankaracharya, has given some excellent talks on Vedanta.
#
And he has a rule, no talk of his is beyond 20-25 minutes.
#
And large numbers of series of talks that he has given, extremely erudite, very scholarly.
#
There is another Swamiji called Swami Omkarananda, who is a follower of the Sringeri tradition.
#
Again, outstanding talks on all, bulk of them are religious.
#
So music, I have named these. There are plenty more. I listen to a lot of Carnatic music.
#
I am currently about to finish this absolute, I think, what I think is going to be a blockbuster
#
by Karthik Muralidharan on state capacity. I have actually found it difficult to put down.
#
That may not be the case with others who are not junkies of policy and state capacity.
#
It's a fascinating book. I recently completed reading my batchmate Subhash Chandragarg's book,
#
which is called We Also Make Policy. It's a very interesting book.
#
Subhash is a very transparent, very sincere, close friend of mine. We are batch mates.
#
We go back a long time. He has written about his days in the Ministry of Finance,
#
and he specifically requested me, since you've spent a lot of time in the Ministry of Finance,
#
can you kindly go through the book and tell me what you think? I've read it. It's very interesting.
#
I recently also finished reading Dinesh Thakur and Prashant Reddy's book on the pharma industry in India.
#
Another fascinating book. Rahul Mathan's book on digital public infrastructure,
#
and where he makes an interesting argument. I had a nice conversation with Ajay today.
#
I have not yet been able to sort of fully internalize and agree with Rahul Mathan.
#
His argument is that other than state markets and, you know, state as in regulation and markets,
#
there may be a third way to handle this mega tech, which is the digital public infrastructure story.
#
It's an interesting argument. I haven't yet figured out that fully.
#
I'm reading Rukmini's book on, you know, that data book on India.
#
So these are the books I'm reading at present. I do multiple books at this time.
#
The other book I enjoyed recently is Narayani Basu on V.P. Menon. What a fascinating book.
#
It may be a one-sided book. I had a nice conversation with Ram Guha after reading the book.
#
But even Ram Guha agreed with me that it's a fascinating book.
#
And what a story in terms of, you know, this is truly nation building and stories from the trenches.
#
So these are the sort of books that come to the top of my mind.
#
I had an episode with Narayani about V.P. Menon and it was titled India's Greatest Civil Servant.
#
And perhaps that title was given away too soon. I could have used it for this episode. I'm just kidding.
#
I've also had episodes. I mean, I've had five episodes with Ram. I've had episodes with Rukmini and Dinesh.
#
And of course, Kartik, I should tell my listeners that don't look for a link to his book in the show notes because it's not out yet.
#
But I have also read a significant chunk of it and it's a masterpiece. Kartik has done three episodes with me.
#
So all of them, which feature him speaking at double speed. So if you, you know, then listen to it at double speed, it gets quite a lot.
#
But thank you so much. This has been such a great privilege and I'm so grateful that, you know, we could do this.
#
Thank you, Amit and thanks for this opportunity. I hope this is of some interest to your listeners.
#
Thank you for listening.
