Economy

Yashwant Sinha: Economic Crisis Intensifying, BJP Will Be Held to Account in 2019

In an interview to The Wire, the BJP leader defends his criticism of Jaitley’s handling of the economy and explains why the government’s policies from Kashmir to Pakistan are wrong.

In an article for the Indian Express on September 27, senior BJP leader and former finance minister Yashwant Sinha lit into the Modi government’s handling of the economy, warning of more turbulence and the possibility of a hard landing. The government’s first response was to field a counter article by Sinha’s son, Jayant Sinha, who is minister of state for civil aviation. Later, finance minister Arun Jaitley publicly attacked the elder Sinha at an event in Delhi. In an exclusive interview to The Wire recorded on Friday, September 29, Yashwant Sinha takes on the criticisms that have been levelled against him by Jaitley and other ministers and commentators, questions what he says are their exaggerated claims about the success of various government reforms and schemes that they had accused him of ignoring and warns that worse is yet to come.

Sinha also attacked the Narendra Modi government’s failure to address the Kashmir issue, and said that India has already lost the people of the valley emotionally. On Pakistan, the Doklam crisis and Trump’s policies towards South Asia, he says the government has no cause to pat itself on the back.

The full transcript is provided below with video timestamp for each subject but here are some highlights:

Rumour that I had lobbied for the BRICS bank job is “part of the dirty tricks department’s handiwork.”

§

Jaitley forgot that by criticising me and quoting Chidambaram – and endorsing his criticism – he is criticising Mr. Vajpayee’s regime. Mr. Vajpayee was prime minister of whose government Mr. Jaitley was a member. Now, is he criticising the prime minister ?

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How can [Jaitley] say that shifting from the ministry of finance to external affairs was a demotion for me? … If Mr. Jaitley with the same stroke wants to say that Sushma Swaraj, the external affairs minister of today, is handling a totally insignificant portfolio, nobody is going to believe it.

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The government says [they have made] massive structural changes which will ultimately, ultimately – god alone knows when that ultimately will come – benefit the people. We are suffering today, you go and ask a young person of 25 who does not have a job. Wait for ten years then you’ll get a job. And see what his response will be.

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[The Modi government’s] Mudra scheme is nothing more than another name for the Pradhan Mantri Swarozgar Yojna which Vajpayee launched [by repackaging an earlier scheme]… Do you know what the average loan amount is of all those millions of people? Eleven thousand rupees! And you tell me, in today’s day and age, what kind of business can be set up with 25 thousand rupees, 50 thousand rupees?… The party president said that all these 80 million people today are self employed which means we have created 80 million job opportunities. This is absolutely untenable.

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At the best of times, something like Rs 40-50,000 crore worth of taxes are involved in litigation … So, whether [the IT department which is looking to unearth black money in bank accounts now] is on a fishing expedition or not, it is an expedition which is not going to succeed.

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People in Kashmir are still waiting from Modi’s 15 August [promise of an embrace] and now it has been six weeks. Then the home minister goes to Srinagar and he says ‘we are prepared to talk to all stakeholders, I invite all stakeholders to talk to me’. Now, what is this? That he is sitting in the guest house, and people will come and seek an appointment? Is this the way a dialogue is conducted?

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I will not talk to [Modi and Rajnath on Kashmir] now. Why? Because I waited for ten months. I waited for six weeks. I am not at their beck and call, that whenever they want they can tell me ‘come, I want to talk with you’.

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I am hurt. I am absolutely hurt. That you ask for time, ten months has gone by…Let me tell you, Karan, ever since I have been in public life, no prime minister of India, starting with Rajiv Gandhi, has ever said no to a meeting I have sought… no prime minister has said to Yashwant Sinha, ‘I don’t have time for you.’ And this is my own prime minister who has treated me like this. So if somebody rings me and says please come talk to me—sorry, the time has passed… I have been treated shabbily.

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I am looking at the alienation of the masses of people in Jammu and Kashmir. That is something which bothers me the most… We have lost the people emotionally… You just have to visit the valley to realise that they have lost faith in us.

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Our policy towards Pakistan must be informed by consistency. At the same time I will say that Pakistan is, unfortunately, a necessary third party in Jammu and Kashmir… And therefore, if you want a final resolution then we’ll have to involve with Pakistan at some point of time… Yes, you can’t carry on with this forever.

§

This killing on the LoC has to stop – nobody is winning a war on the LoC – the LoC is very well defined – and it was proved in Kargil that the world was with us rather than with Pakistan on this – you cannot alter the LoC, so let’s have peace on the LoC and it is possible to have peace on the LoC despite all our differences with Pakistan.


[TRANSCRIPT]

Karan Thapar: Hello and welcome to a special interview of Yashwant Sinha for TheWire.in. On Wednesday, Mr. Sinha wrote a critique of the handling of the Indian economy – and, in particular, the finance minister’s handling of it – for the Indian Express and it’s created a storm of controversy.

Yesterday, writing in the Times of India, his son, Jayant Sinha, who is also a government minister, wrote a piece that is widely interpreted as a rebuttal of his father’s view. And in the evening, the finance minister himself spoke out at a book launch. With me today to talk about the way that BJP has responded to his Indian Express article, about the critique in the article, as well as about the importance of other issues of national importance, is, Yashwant Sinha himself.

Mr. Sinha, let’s start with Arun Jaitley’s response to the Indian Express article. He’s called you ‘a job applicant at 80’. How do you respond to that?

On Jaitley’s charge of being ‘an 80-year-old job applicant’
(0:48 – 3:46)

Yashwant Sinha: My response is very simple, Karan. I have raised some issues relating to the economy and I noticed that the attempt on the part of the government was to divert attention from the issues to something else. That something else you have mentioned was this article from my son, his appearance on some television channels – and the attempt was what, it was to reduce it to a father-son controversy, a duel between the father and the son and some of the TV channels did take that line, you know, until they realised that there was no truth in it. And I told them very clearly that it is not a father and son issue, it is much more serious that. Then, yesterday as you said, speaking at book launch function, Mr. Jaitley decided to make this very personal and cheap attack – that I am looking for his job, that I am a job applicant at the age of 80. Now what can be cheaper than that, you know, and I’ll tell you that I’ll be reducing my own dignity if I respond to accusations of this kind.

Thapar: I can understand your personal anger. I’ll come in a moment to your critique, but let me pursue for a moment what Mr. Jaitley said. Have you ever during the three and a half years of the Modi government asked them to appoint you to a particular job or a particular position?

Sinha: No, you go and ask Jaitley. Somebody should have asked Jaitley but he chose a platform where no questions were being, or could be, asked. So let them answer it. If they have any record to say that I am looking for a job, for god’s sake make it, bring it in the public domain. As far as I am concerned, I deny it with the full force at my command.

Thapar: BJP sources are letting it be known that on three separate occasions you approached the government to appoint you as chairman of the new BRICS Bank, a job that eventually went to K.V. Kamath. This is what they are whispering in the corridors. Is it true?

Sinha: No, it is not true. What I’d like to mention to you is that in those days there were media reports in some newspapers that two names were under the consideration of the government for the BRICS Bank. One was Arun Shourie’s, and the other was mine. This appeared in the newspapers. Nothing came out of it and the matter ended there.

Thapar: But you didn’t approach the government specifically?

Sinha: No, no, no.

Thapar: So the rumour that’s been whispered in corridors that you’ve approached the government…

Sinha: It’s part of the dirty tricks department’s handiwork.

On Jaitley’s unsuitability as finance minister
(3:47 – 6:56)

Thapar: One reason why this speculation is afoot is because many people say, it was one thing to critique the economy but Yashwant Sinha has also personally attacked Arun Jaitley and this reveals, they say, a certain animus, a certain antipathy. Do you have any ill feelings for Arun Jaitley?

Sinha: I have no ill feelings for anyone. I had to put it in a certain context, and let me remind you that the context was that [the] finance ministry is a 24×7 job and the person who is in charge of the finance ministry and many other ministries simultaneously naturally will not be able to give attention to the issues which arise from time to time in the economy, in the same manner in which, if he did not have those responsibilities, he would have done. It was in that context that I had raised the issue and if anyone has any difference of opinion with me on that, let them contradict me on facts.

Thapar: To be honest, Mr. Sinha, you went one step further, right at the start of your article you pointed out that Arun Jaitley was made finance minister despite the fact that he lost the Amritsar election and in that context you also wrote “one may recall that in similar circumstances, Atal Bihari Vajpayee had refused to appoint Jaswant Singh and Pramod Mahajan, two of his closest colleagues in the party, to his first cabinet in 1998.” Are you saying that appointing Mr. Jaitley finance minister when he was a defeated candidate was a mistake?

Sinha: You know, I am saying it in a context and please understand the context. I am saying it, it’s a fact that Mr. Vajpayee did not make Jaswant Singh or Pramod Mahajan a minister in his first cabinet. This is a fact, nobody can deny it. The point I am making is that [Jaitley] was not merely given the ministry of finance, which included the department of disinvestment, he was given additional charge of the corporate affairs ministry and, to boot, the defence ministry.

Thapar: That I understand. He was given so many responsibilities –

Sinha: And going further I’ve said what.. I’ve said, at the best of times, finance ministry is a tough job and in the challenging times it becomes more than 24×7, and the point I am making is, therefore, because of his onerous responsibilities, he could not devote time to the finance ministry as he should have.

Thapar: That I understand, that he had so many responsibilities, so many portfolios that he couldn’t devote the time required to the critical finance ministry. But when you earlier point out that he was appointed finance minister despite being a defeated candidate, something that Atal Bihari Vajpayee had consciously chosen not to do, are you also suggesting that in fact he shouldn’t have been appointed finance minister in the first place?

Sinha: May be. May be. I mean, if you followed the same rule that Mr. Vajpayee followed – and political parties are public bodies, isn’t it? You can’t make a rule today and change it tomorrow –

Thapar: Then isn’t it a personal attack on the man himself?

Sinha: No it is not. It is said in a certain context.

On Jaitley’s charge that Sinha’s record as finance minister was bad
(6:57 – 9:53)

Thapar: In response, at that speech that he gave yesterday at the book launch, Arun Jaitley quoted [former finance minister P.] Chidambaram to get back at you. First of all he said with reference to 2000-2003, when you were finance minister, that Mr. Chidambaram had said that these were the worst years since liberalisation in terms of growth. And I presume the point Mr. Jaitley was making is that given your track record as finance minister, you have no right to criticize his handling of the finance ministry.

Sinha: It’s never been a tradition that you have to keep your record in mind before you level any criticism against anyone. Point number 1. Point number 2 is, I am history. I gave up the ministry of finance 15 years ago! The people of this country have given their judgment on my performance as a finance minister and Mr. Vajpayee’s government’s performance as a whole, in 2004. That is not the issue of the day.

Thapar: So the comparison is irrelevant today?

Sinha: Absolutely irrelevant, and also let me make this point, that he forgot that by criticising me and quoting Chidambaram – and Chidambaram belongs to another party so forget about him – but by quoting and endorsing his criticism, he is criticising Mr. Vajpayee’s regime. Mr. Vajpayee was prime minister of whose government Mr. Jaitley was a member. Now, is he criticising the prime minister?

Thapar: Possibly, that is for Mr. Jaitley to answer, but Mr. Jaitley went one step further once again by quoting Mr. Chidambaram. He says, “Vajpayee had to force you out of the finance ministry and replace you”. Is it a truth that you were removed from the finance ministry because of your poor performance as finance minister, as Jaitley is suggesting by quoting Chidambaram?

Sinha: No, then where did Mr. Vajpayee send me? If my performance was so despicable, then he would have told me, Yashwant Sinha, walk out of this government, I don’t want to give you any other post. Okay. But Mr. Vajpayee made me the external affairs minister of this country at a very critical time when the armed forces of India and Pakistan were eyeball to eyeball, you will recall –

Thapar: So this was not a demotion or a sideward shift?

Sinha: How can anyone say that shifting from the ministry of finance to external affairs was a demotion? I continued in fact as a more important member of the cabinet committee of security as external affairs minister. I became the spokesperson of the CCS.

Thapar: So your importance grew, it did not diminish?

Sinha: It did not diminish, number one, and number two is if Mr. Jaitley with the same stroke wants to say that Sushma Swaraj, the external affairs minister of today, is handling a totally insignificant portfolio, nobody is going to believe it.

On the charge that he ignored Modi’s reforms
(9:53 – 12:03)

Thapar: You haven’t lost your political touch, that is for sure, you find very clever ways of getting back! But let’s leave the rebuttal aside, I’ve covered that adequately. Lets come to your critique itself. In an article that your son who is a minister himself wrote in the Times of India – which many believe was in fact a rebuttal of your views – he points out that you’ve missed what he calls the fundamental structural reforms that are transforming the economy. Now, no doubt in your article you’ve spent a fair amount of time talking about GST but you hardly had anything, in fact even a word to say about things like the bankruptcy code, the Real Estate Regulatory Authority, the Mudra Bank scheme, the Jan Dhan Yojna, leave aside the fact that the government is so proud of the fact that today they are building double the number of roads built in 2014 – that’s something your son was particularly proud of – that the country today, as he put it, is on course to achieve a hundred percent electrification by 2018. Now did you forget about these or did you think that these weren’t significant enough to mention?

Sinha: No, I was not writing the party’s manifesto. You know, I was not writing a book on the achievements of the party. In that article, I was only trying to point out the weaknesses in the management of the economy at present. This was the whole purpose of that and what is the point I am making there? the point that I am making is that this happened, that happened as a result of which today, sector after sector of the Indian economy is in distress. And I have quoted some of, named some of the said sectors. Now, I am not an apologist for the government, that was not the intent of the article so therefore, for anyone to say that I should’ve mentioned this I should’ve mentioned that, you know, these are all massive structural changes which will ultimately, ultimately – god alone knows when that ultimately will come – benefit the people. We are suffering today, you go and ask a young person of 25 who does not have a job. Wait for ten years then you’ll get a job. And see what his response will be.

On Amit Shah’s claims that Mudra scheme created 80 million  jobs
(12:03 – 15:23)

Thapar: I understand that your article was a critique, it wasn’t an attempt to paint a portrait, on the other hand, talking about the things that had benefitted the people was in fact central to your argument and you, according to Piyush Goyal in an interview he gave to Business Standard, overlooked the fact that the Mudra Bank scheme has distributed some 3.5 lakh  crore [rupees] in the last three years to 80 million people. Now if his facts are correct, and I assume they are, that’s a huge benefit that will accrue to people that previously wouldn’t have had it.

Sinha: This is where institutional memory becomes important. I think, when Rajiv Gandhi was the prime minister or Narasimha Rao, long years ago they started a scheme called Pradhan Mantri Rozgar Yojna. What was the yojna, what was the scheme? The scheme was the district industry officer would identify the people, tell them what industry, what shop to set up, then take them to the bank and the bank will give them the necessary funds to begin that business. Right? This was Pradhan Mantri Rozgar Yojna, which we converted into Pradhan Mantri Swarozgar Yojna because we distinguished it from other forms of employment generation schemes. Now, at this time, the Mudra scheme is nothing more than another name for the Pradhan Mantri Swarozgar Yojna. And only the other day, yesterday perhaps, I saw a news report where the prime minister is saying, things have not worked out, please do something about it, and to think, do you know what the average loan amount is of all those millions of people? Eleven thousand rupees! And you tell me, in today’s day and age, what kind of business can be set up with 25 thousand rupees, 50 thousand rupees?

Thapar: So you are saying two things, one, the Mudra scheme that Piyush Goyal was so proud of is in fact a renaming, something that has been there since Atal Bihari Vajpayee’s time, and second, the amount of loan given per person to these 80 million is so small as to be insignificant?

Sinha: Yes, so it will be misused, we don’t know the result. You know, the party president said that all these 80 million people today are self employed which means we have created 80 million job opportunities. This is absolutely untenable. You know, because there must be some assessment, how many people have –

Thapar: You’re again suggesting this is a figure he’s plucked out of thin air, or concocted –

Sinha: Wherever, but giving a loan doesn’t mean that that person has become self-employed. The experience of the Pradhan Mantri Rozgar Yojna was that people used to take the loan, mis-spend it – they didn’t set-up businesses, they spent it on their daughter’s marriage, sister’s marriage.

Karan: And the same is probably happening now.

Sinha: The same probably happens. There must be an evaluation, where is the evaluation of this mudra scheme?

Thapar: So this claim, without evaluation, is not just boastful, it’s misleading.

Sinha: Absolutely.

On the Modi government’s macroeconomic record
(15:23 – 18:38)

Thapar: Let me then quote to you what Rajiv Chandrasekhar, another NDA supporting MP very close to the present regime has also written in the Indian Express. He says, “the UPA had left behind a broken economy. Over 12 quarters of successive GDP decline, 24 quarters of rising inflation, a record current account deficit of 400 billion dollars. Fiscal profligacy, declining capital formation, flight of foreign investors and scam-inspired plummeting of investor confidence.” And he adds, “a wrecked banking system.” Now clearly, that is not the state of affairs today, yet you don’t give the government credit for putting things right, whether partially or fully, in fact you give them no credit at all.

Sinha: No, what I am saying is that we’ve been in office for 40 months now, there were legacy issues, in my own article you’ll remember I described stalled projects and bank NPAs as legacy issues this government had to inherit unfortunately, and I’ve said they should’ve been attended to. Now, 40 months down the line, it is not open to us or to the government to say this was the situation in the UPA time. So what have you done? Are we going… no listen.. for 12 quarters, whatever, Rajeev Chandrashekhar is saying there was decline [then], there has been decline in the last 6 quarters!

Thapar: 24 quarters of rising inflation –

Sinha: Yes, so inflation is rising –

Thapar: Marginally.

Sinha: Okay, one doesn’t know where it will go, the current account deficit is increasing..

Thapar: Marginally.

Sinha:  2.5 percent…

Thapar: Marginally.

Sinha: No, no, I agree, I was the biggest critic of the [UPA’s] mismanagement of the economy.

Thapar: But you are not conceding that the government has improved the macro situation very considerably. It may be deteriorating once again slowly and incrementally but the improvement is huge.

Sinha: No, that is the point, it is not enough to say that we have improved it somewhat.

Thapar: It’s not sufficient?

Sinha: No, have you got rid of the bank NPAs problem? Haven’t the bank NPAs risen every 6 months as the figures come?

Thapar: Isn’t the bankruptcy code one step towards by doing that, by tackling companies that bankrupt so that they can then have their assets sold. Hopefully.

Sinha:  We already had this SARFAESI Act. Which I had –

Thapar: So it’s more of the same?

Sinha: More of the same. That’s what I am saying, the issue is stalled projects and bank NPAs – the two have to be related. We have to get rid of the stalled projects, we have to do something about the recapitalisation of the banks.

Thapar: The issue is you are also saying they haven’t done enough, they have taken a few steps but they are not sufficient.

Sinha: They are not sufficient and that is the reason we are seeing this present decline in the growth rate.

Karan: So what you are saying in a nutshell is that they may have taken small steps but they are inadequate, they haven’t been pursued with the diligence required as a result of which there may be marginal improvement but the situation by and large is getting worse because the improvement isn’t happening.

Sinha: Again, once again, it is getting from bad to worse.

On why demonetisation will not help detect black money
(18:38 – 23:25)

Thapar: Let’s then come to your description of demonetisation because it  has attracted a lot of attention in particular. You called it an unmitigated economic disaster. I will readily concede that so far as the aim of demonetisation was to tackle counterfeit currency or terror funding, its failed. But can you really call it an unmitigated disaster so far as the key aim, which is tackling black money?    

Sinha: How much black money have we been able to tackle?

Thapar: Can I answer that for you?

Sinha: Yes.

Thapar: Okay, I will. In his budget speech in February the finance minister announced that 4.9 lakh crore rupees had been deposited in 148,000 bank accounts where the average deposit is 3.3 crore, the minimum deposit 80 lakhs. Roughly five days later ,T.N. Ninan, the chairman of the Business Standard, referring precisely to these figures had said, “it’s all but certain this is black money unearthed by notebandi.” And shortly thereafter, Surjeet Bhalla  who’s now joined the prime minister’s economic advisory council writing in the Indian Express said that if this money can be established to be black the government will earn a windfall of 2.5 lakhs in the first year and 1.5 lakh every year in perpetuity. If that happens  this will be a huge gain.                                                                                       

Sinha: If, If that happens that money is identified as black money. Now there are two facts, three facts that we must remember. Number one, all the currency notes have come back. okay?

Thapar: That particular point doesn’t detract from this argument. It’s because they’ve all come back that you have an opportunity to identify them as black.

Sinha: I am coming to that, first, all the currency notes have come back, number two they have started, as I’ve said in my article, millions of cases of income tax…

Thapar: 18 lakh.

Sinha: That means 1.8 million. They have started these cases to go after these people. Now, you know what happens to these income tax cases. Has anything been established so far?  We are at the end of the month of September.

Thapar:  Well, we don’t know, is the honest answer, though you may be right in being doubtful. But the truth is that we don’t know.

Sinha: So, ultimately it is going to take us, Karan, years, years, before that black money, if at all, is identified, because those who’ve deposited the black money knew full well that they will be identified and they will have a defence.

Thapar: Let me put to you the argument the government makes and it’s this – identifying money that’s been stashed in banks as black is going to be [A] cumbersome [B] it will take time and [C] it will be questioned in courts. That has always been the case. That’s not new. What’s new this time is that the government has [A] identified specific accounts to target and [B] they have good reason to target them. No longer is it a fishing exercise, now it’s targeted with some justification. That‘s where the difference’s come now.

Sinha:  Anyone who is depositing the money in the bank during that period knew, because the income tax department, government had announced that they will go after them. They will have their defence ready. And let those cases… those cases will just go on. Lets wait and see. You and I will be around.

Thapar: So, you’re saying to me that the government’s capacity, or the system’s capacity, to identify black money at such vast numbers of deposits running into tens of lakhs of crores possibly, is not just limited, you’re saying it’s probably close to not possible?

Sinha: I’m saying that these accounts, these deposits will be defended. The IT department will take its own time on various levels of appeal. All this is going to take time. This money is not going to come in anyone’s pocket in a hurry, and nothing will happen at the end. Do you know Karan, that at the best of times, something like Rs 40-50,000 crore  worth of taxes are involved in litigation? I don’t know what the present figure is. But, I remember that this was the figure – that Rs 50,000 crore rupees are involved in litigation.

Thapar:  Now, we’re talking of jumping that figure from Rs 50,000 crore possibly to 10 lakh crore rupees? Which means the act of identifying becomes that much more difficult and that much more unlikely?

Sinha: Absolutely! So, whether it is a fishing expedition or not, it is an expedition which is not going to succeed.  

On why he is blaming Jaitley and not Modi
(23:35 – 26:45)

Thapar: Let me come to one more point or criticism of your critique made in that Express article. You give the impression of blaming the finance minister, not just primarily but almost wholly for the economic crisis that the country faces and you seem to exonerate the prime minister. Many people say he is the head of the  government and at the end of the day if things are going wrong. it is his responsibility. Surely, people point out not just a fair share of the possibility but a lion’s share must lie with Mr Modi. Yet in that article there ‘s no criticism of Mr Modi at all, beyond suggesting that he is slow in advising the economic adviser.

Sinha: Will you give me the same concession as far as Jaitley’s criticism of my handling of the finance ministry during Vajpayee’s time is concerned? Did he blame Mr Vajpayee? Or didn’t he blame me personally?

Thapar: That’s a fair point.

Sinha: Second point, he handles the ministry of finance, so if I’m talking of economic issues I will discuss his performance, his role, not the prime minister. He is the prime minister of the whole government.

Thapar: Let me say why in this instance criticising the prime minister was perhaps called for and not doing so looks as if you are deliberately exonerating him. A) and you have conceded that almost a moment ago, that in the circumstances where Jaitley was a defeated candidate, he shouldn’t have been appointed finance minister in the first place. Yet, Mr. Modi deliberately went to do so. Number two, Mr. Modi has persisted with him for three years despite the rising criticism.  Number three, Mr. Modi has taken no steps to correct the policies Mr. Jaitley is imposing, leave aside ask him to take specific action for the problems that you’ve identified.  And, finally, as you point out, Mr. Modi may have appointed an economic advisory council but he has done it too late and it’s too little. Surely, given that, Mr. Modi does deserve a fair amount of criticism. He’s, at the very least, guilty of wrong choice, not supervising, negligently allowing a bad finance minister to continue and make the situation worse. But all of that you’ve ignored.

Sinha: A time will come; let’s see how it unfolds.

Thapar: A time will come when what will happen?

Sinha: When we will examine the performance of the prime minister.

Thapar: So you are holding your criticism of the prime minister in check for the moment?

Sinha: I am not saying anything at the moment. I am just saying that a time will come when not only the performance of the ministry of finance but the performance of the whole government will be under the scrutiny.

Thapar: So it’s not that you’re giving the prime minister a clean chit, you are waiting for the right moment when that will come.

Sinha: You used the word exoneration. I don’t think I have exonerated anyone.

Thapar: You just haven’t criticised as yet.

Sinha: For the time being, I have confined myself to economic issues handled by the ministry of finance and I am holding Mr. Jaitley, who is the finance minister, generally responsible for this.

Thapar: But a time will come when you will focus your attention –

Sinha: A time might come when we’ll examine the performance of the whole government.

Thapar: Why have you switched from will to might? It was ‘a time will come’ earlier and now you’re saying, ‘a time might come’. Why are you watering it down?

Sinha: No, I am not watering it down. It is just a use of word.

On what needs to be done to end alienation in Kashmir
(26:45 – 30:55)

Thapar: Let’s then broaden our discussion at this point. So far, I have talked about the Indian Express article and the way the BJP has rebutted it and your response to all of that. But before you wrote the Indian Express article, a lot of your time and attention was devoted to the situation in Jammu and Kashmir. You probably know it today better than most people. How would you first assess and describe the situation in that valley?

Sinha: We visited the valley about six weeks ago again and again interacted with a wide range of people. In our report, we have pointed out that we found there was more despondency among the people this time than there was earlier, even in 2016, in the wake of the Burhan Wani –

Thapar: It has deteriorated?

Sinha: It has deteriorated. The security forces are killing the so-called militants. That is happening. But the alienation, which is the fundamental issue in Jammu and Kashmir, the alienation today is deeper, wider than it was earlier.

Thapar: In the report that your team presented in January, there was a striking sentence, which I am going to quote to you. You said, “there is near complete lack of faith in anything that the government of India says or promises because of a history of broken commitments”. You added “They”, meaning the Kashmiri people, “feel that India refuses to recognise that Kashmir is a political problem and therefore requires a political solution”. In other words, they feel they are not understood and the government over here is making no effort to understand them.

Sinha: This is further complicated, this feeling, by the fact, that on August 15, from the ramparts of the Red Fort, the prime minister said ‘let’s not abuse them, let’s embrace them’.

Thapar: “Na goli se, na gaali se, gale laga ke” (Not with bullets or abuses, but with an embrace).

Sinha: So embrace them. People are still waiting from August 15 and now it has been six weeks. Then the home minister goes to Srinagar and he says ‘we are prepared to talk to all stakeholders, I invite all stakeholders to talk to me’. Now, what is this? That he is sitting in the guest house, and people will come and seek an appointment? Is this the way a dialogue is conducted?

Thapar: He has to specifically invite them.

Sinha: We have said it in a press statement the other day, that now, with the prime minister having said what he said, the home minister having said what he has said, it is time to operationalise these statements from rhetoric to action. And what should they do? They should first identify the stakeholders. When we say we’ll talk to the stakeholders, who are their stakeholders?

Thapar: Does that include, in your eyes, the Hurriyat?

Sinha: It does. They themselves have said in the Agenda of Alliance that all stakeholders include –

Thapar: But since then they have backed away from the Hurriyat.

Sinha: So let them say whether Hurriyat is a stakeholder or not.

Thapar: So clarity is the first thing?

Sinha: First, clarity on who their stakeholders are. They should do that, number one. Number two, then they should say who the interlocutor for the dialogue from the government side will be. Is it going to be a home minister? It was Mr. Advani, the deputy prime minister, who was the interlocutor on behalf of the government.

Thapar: And you think it needs to be someone of equivalent standing now?

Sinha: It should be. So is it going to be a home minister? Is it somebody specially appointed? Is it going to be a single member task force? Is it going to be a multi-member thing? All these things will have to be decided.  Then you have to set out a time frame. That we are going to meet the stakeholders in this manner. Send out invites, ask them to come wherever and talk to the interlocutor.

Thapar: So it isn’t interminable, it has to have fixed timeframes?

Sinha: Of course, it has to have a fixed timeframe. Nobody in Kashmir is going to accept something which is indeterminate. So these are the steps we have said, in a press statement recently, the government should take and immediately start the dialogue process so that the political problem can be addressed.

On being treated shabbily by Modi
(30:55 – 32:27)

Thapar: You said, in the interviews you’ve given since your Indian Express article, that ten months ago you asked for an appointment with the prime minister and it was never granted. Had it been granted, and I gather there was also six weeks ago a request made separately to meet the home minister and that too hasn’t been granted, although that’s only been for six weeks. But if either of these requests is granted to meet the prime minister or the home minister, is this the advice you’d give them?

Sinha: I will not talk to them.

Thapar: You will not talk to them now? Why?

Sinha: Why because I waited for ten months. I waited for six weeks. I am not at their beck and call, that whenever they want they can tell me ‘come, I want to talk with you’.

Thapar: Is this hurt, pique or pride?

Sinha: Of course, it is hurt!

Thapar: You are hurt?

Sinha: I am hurt. I am absolutely hurt. That you ask for time, ten months has gone by… Let me tell you, Karan, ever since I have been in public life, no prime minister of India, starting with Rajiv Gandhi, has ever said no to a meeting I have sought. No prime minister, and there have been many prime ministers – I have worked with some, with some I have been in the opposition – no prime minister has said to Yashwant Sinha, ‘I don’t have time for you.’ And this is my own prime minister who has treated me like this. So if somebody rings me and says please come talk to me – sorry, the time has passed.

Thapar: Yashwant Sinha is candidly saying, I am not just upset, I am hurt, I have been treated badly –

Sinha: I have been treated shabbily.

Thapar: Shabbily?

Sinha: Absolutely.

On the fact that India has lost the people of Kashmir emotionally
(32:27 – 34:59)

Thapar: One more question about the government’s attitude to Kashmir. Many people, not just in the valley where I think this view is widespread, but even in the rest of India, believe that the government is either unconcerned about what is happening or if they are aware, they are deliberately allowing the situation to deteriorate. How would you describe and characterise the government’s attitude to Kashmir at the moment?

Sinha: The government is looking for a military solution. And in today’s newspapers there is a report that even the northern army commander has said that we have broken the back of militancy in the valley and this is the time now to start a dialogue process. Why aren’t they starting it? Why are they beating around the bush? Why are they only making rhetorical noises and not doing the actual thing?

Thapar: And if they don’t do the actual thing, you’re saying the situation is fast deteriorating. Where would we get to if the government doesn’t act?

Sinha: Further, if they don’t act immediately, then that impression we have recorded in our report that government of India is not concerned, they are not bothered about us, that feeling will deepen in the valley. 

Thapar: How bad could things become? What is the downside we are theoretically looking at?

Sinha: I am not looking at militancy here, militancy there, how many people they have killed. I am looking at the alienation of the masses of people in Jammu and Kashmir. That is something which bothers me the most.

Thapar: Could we end up losing, at least emotionally if not politically, the people of Kashmir?

Sinha: We have lost the people emotionally.

Thapar: We have lost the people?

Sinha: We have lost the people emotionally. You just have to visit the valley to realise that they have lost faith in us.

Thapar: In other words, physical separation may or may not happen but emotional separation has happened.

Sinha: It has taken place. Alienation has taken place.

Thapar: Is it possible to climb back and reverse the situation?

Sinha: If we start now there is a possibility because at the same time, I would say, there is a constituency for peace in Jammu and Kashmir and it’s our last chance almost to get hold of that constituency and move forward.

Thapar: If we lose our last chance then what?

Sinha: Then god alone knows. I am not saying that the territory can be taken away from us because we will not allow that to happen.

Thapar: But you will have an utterly unhappy people at your border.

Sinha: We already have utterly unhappy people there.

On the Modi government’s flip-flops on Pakistan
(34:59 – 38:00)

Thapar: Now I’m talking to you Mr Yashwant Sinha not just as an illustrious former finance minister, which is the capacity in which you wrote your article for the Indian Express, I’m also talking to you as a very highly regarded foreign minister and I want to put to you a couple of questions about India’s key relationships. First Pakistan – do you believe the surgical strikes of September last year and the tougher posturing on the LOC thereafter have strengthened India’s hands vis-à-vis Pakistan or have they simply and only ratcheted up tension on both sides?

Sinha: No I’m extremely unhappy that the situation along the LOC has been allowed to deteriorate and there is – always there are acts of violence from both sides – something which we had been able to bring under complete control when Vajpayee was the prime minister.

Thapar: The 2003 ceasefire?

Sinha: Absolutely. So that is an issue which is causing a great deal of concern. As far as Pakistan is concerned, there must be consistency in our policy. You are aware of my views, I’ve consistently held that terror and talks cannot go together, but that was my view when Mr. Modi invited Nawaz Sharif to Delhi, that was my view when he made a dash to Lahore to meet Nawaz Sharif, that is my view today, but that was not the view of the government earlier – they sent the foreign secretary to Islamabad – then the foreign minister went to Islamabad – so there has been a flip and flop –

Thapar: And that continues.

Sinha: That continues. Now they’re saying we’ll not talk, we’ll not talk, but the point is, you have not been consistent. Our policy towards Pakistan must be informed by consistency. At the same time I will say that Pakistan is, unfortunately, a necessary third party in Jammu and Kashmir.

Thapar: And that has to be –

Sinha: Exactly. And therefore, if you want a final resolution then we’ll have to involve with Pakistan at some point of time.

Thapar: So the refusal to talk to Pakistan at some point of time is a mistaken response because it’s a reality we’re not accepting?

Sinha: Yes, you can’t carry on with this forever.

Thapar: But you said something else. You said beyond the refusal to talk to Pakistan over Kashmir, which is something you can’t carry on forever, beyond the inconsistency, you are also saying this muscular approach on the Line of Control of which the government is sometimes so proud is actually the wrong response?

Sinha: It is, because on the LoC we are equally balanced – sometimes they kill us, sometimes we kill them. This killing has to stop – nobody is winning a war on the LoC – the LoC is very well defined – and it was proved in Kargil that the world was with us rather than with Pakistan on this – you cannot alter the LoC, so let’s have peace on the LoC and it is possible to have peace on the LoC despite all our differences with Pakistan.

On Doklam and relations with China
(38:00 – 39:05)

Thapar: Let’s come to Doklam. There is a view that the government has handled Doklam very well and in particular it scored a point by forcing the Chinese to agree to a mutual withdrawal Do you share that view?

Sinha: The Chinese have another view, and they have expressed it. They have said that the Indians withdrew first, before we withdrew. The main achievement, I think, of this whole handling has been that for the time being they have stopped building that road in Doklam that they were trying to build.

Thapar: When you say ‘the time being’, you are suggesting it’s something very temporary?

Sinha: They have said – they, the Chinese themselves have said that it is temporarily suspended, it’s not permanently suspended.

Thapar: You’re suggesting it’s just a respite.

Sinha: Yes, and experts on China are saying that we should be prepared for more Doklams,  so we can’t let our guard down, one. Two, I think on Doklam it is a very bad policy to beat our chest, thump our chest and say, ‘Oh we’ve won’.

Thapar: Because that’ll put the Chinese backs up?

Sinha: Yes of course it will.

On Trump and the US-India relationship
(39:05 – 41:13)

Thapar: What about the relationship with America? The government is particularly pleased with the prime minister’s visit to Washington in June, when there was much embracing between Donald Trump and Narendra Modi and the impression was created that they have established a sort of bond of personal friendship. The government is also particularly pleased with the American president’s recent speech on Afghanistan where he criticised Pakistan but spoke warmly of India. Do you believe that the relationship between Delhi and Washington has got off in this new administration to a good start?

Sinha: I would say that President Trump has brought about a very radical change in US policy towards the subcontinent and I’m including Afghanistan in this, Earlier there was hyphenation – anyone coming from the US will also go to Pakistan or go from Pakistan to India – that hyphenation we were all trying to end, but our success was limited. Pakistan still remained a frontline state for the US but with Trump now and his take and his world view – Trump has a worldview of his own, it’s not been contributed by us – according to his worldview, now we have a bigger role in Afghanistan and he’s taking Pakistan to task for being a haven for terrorists, so that is going in our favour, there’s no doubt about it.

Thapar: But you’re giving credit for this significant change entirely to Donald Trump – you’re not saying that Mr Modi’s influence on him or the relationship he’s built up with him has any role to play, leave aside credit to take.

Sinha: No, absolutely not. We have known from his pre-presidential speeches what his world view was.

Thapar: We just fit in conveniently.

Sinha: Which is where it is, and we should be happy that this is his world view and take advantage of it.

Thapar: So we’re benefiting from a position that the American president has taken, we can’t claim any credit for influencing him?

Sinha: No we can’t. I think it’ll be wrong on our part to say it’s because of our efforts that there has been a change.

On the BJP’s aversion to criticism
(41:13 – 43:07)

Thapar: Before I end this interview Mr. Sinha, I want to come back to the manner in which the finance minister, the home minister, the railway minister and several unidentified and unreferred to members of the BJP have responded to your Indian Express article.

In an interview the prime minister gave to CNN News 18 exactly a year ago in September 2016, he said and I’m quoting him, “Mera yeh spasht mat hai ki sarkaron ki, sarkar ke kaam kaaj ka, kathor se kathor analysis hona chahiye, criticism hona chahiye – warna loktantra chal hi nahin sakta (‘It is my firm belief that there should be tough analysis, and criticism, of governments and their policies, otherwise democracy will not work’). How do you view the prime minister’s very strong statement in the light of the fact that his ministers and his party have descended on you like a tonne of bricks when you chose to speak out? You were giving the criticism the prime minister has invited but you’ve been rebuffed by his party for doing so.

Sinha: Absolutely – and more recently they did tell – the Bharatiya Janata Party national [executive] that ‘dal ke upar desh hai’ – if there are national issues, then party interests will be submerged, they will be subsumed and we’ll talk about national issues – but obviously his ministers and other party people are not prepared to be guided by what the prime minister is saying.  

Thapar: So the question that arises is, is the prime minister being hypocritical when he says these things, because he’s allowing his party to criticise you personally and savagely without admonishing them? Or did he not mean them, or can he not control his party men – which of the three is it – hypocrisy? Can’t control? Or is he in fact encouraging them?

Sinha: I don’t know really, and time alone – let’s see how it unfolds – we’ll keep this admonition in mind, we’ll keep his recent statement in mind, and see how it unfolds.

On lack of jobs and the BJP’s poll prospects for 2019
(43:07 – 45:53)

Thapar: Now in your Express article you also said and I’m quoting you – “there is no magic wand to revive the economy overnight, the steps taken now will take their own time to produce results, so a revival by the time of the next Lok Sabha elections seems highly unlikely “. How do you view the remaining 18 months of this government?

Sinha: I have also said, somewhere in that article that it took us four years to put the economy back on track from ‘98 to 2000. Economies as I’ve said can be destroyed more easily than they can be built – so keeping this in mind I would say, reiterate, that on any of these major issues in the economy like basically revival, employment generation, agricultural distress, things are not going to happen in a hurry – certainly not over the next 18 months, it’s going to take time.

Thapar:  So the sense of economic crisis that prevails today and the sense of despondency that’s created is likely to continue over the next eight months?

Sinha: If not intensify.

Thapar: If not intensify? In other words, things could get much worse?

Sinha: Yes, especially on the employment front.  

Thapar: In which case my last question. Given the economic crisis and the possibility it could get worse, given the fact that for many people, the very important job creation that we were hoping for has never happened do you think the BJP can win 272 seats in 2019?

Sinha: I’m not going to be predicting what will happen in 2019 but the point I’m making is we certainly will be held to account.

Thapar: Does that also mean that winning another outright majority seems unlikely?

Sinha: No, I’ll not go into numbers.  I’ll not predict what the victory or otherwise – the point I’m making is people will demand answers and we must be prepared to give…

Thapar: So what you’re saying in other words is that the tens of millions, or the hundreds of millions who may have voted for the BJP because the prime minister promised acche din – they may have voted for the BJP because in his famous rally in Agra in 2013 he said we will create 1 crore jobs in a year – and no acche din have come and nowhere near 1 crore jobs have been created in 3 years leave aside 1 year, you’re saying people will remember that and hold the government to account?

Sinha: They will, they will, and we must be ready with our answers.

Thapar: People will in other words, feel betrayed, deceived and let down?

Sinha: If there is no dramatic improvement in their situation.

Thapar: They will feel deceived.

Sinha: Yes.

Thapar: Mr. Sinha, a pleasure talking to you.

Sinha: Thank you.