In an interview with Karan Thapar for The Wire, former finance minister P. Chidambaram talks about the Padmavati controversy, Rahul Gandhi’s leadership and the upcoming Gujarat elections.
Karan Thapar: Hello and welcome to a very special interview with former home minister and finance minister P Chidambaram for The Wire. Over the course of the next 45 minutes, I should talk to him about topical and important social, political and economic issues. Mr Chidambaram, let’s first start with a critical issue raised by the Padmavati controversy. Now I want to put that to you, not just as a former home minister, but one of the country’s leading lawyers. In a democracy, does freedom of expression and freedom of speech permit a director to interpret historical events, or historical personages as he deems fit, or is he required to do it along the lines the majority accepts as reliable and preferable.
P. Chidambaram: As a matter of law, freedom of speech and expression is nearly absolute. It’s subject to very very narrow limitation of national security. Unless accompanied by violence, I think that freedom is almost absolute. And it is certainly not subject to censors, self-appointed censors, and what I think the opponents of the movie are trying to do without seeing the movie, is to censor it, when that role is a role given to the Central Board of Film Certification. Apart from that, I have not seen the movie, I don’t know whether it’s fiction, or nonfiction, or fictionalised history. I think each of these genres has a certain liberty, and unless one sees the movie, I think it will be completely unacceptable to censor it without even seeing the movie.
Thapar: But as a former home minister and as a leading lawyer you believe a director has the right to interpret historical events and historical characters, as he wants, creatively and imaginatively? He doesn’t have to follow, either tradition, or the thinking of the majority?
Chidambaram: Obviously, he does not have to follow the thinking of the majority. This is not a collective literary work of the majority. We’ve had movies on Lincoln, we’ve had movies on JFK, we’ve had movies on many other historical personalities…
Thapar: Christ as well…
Chidambaram: And Christ as well, and I think a creative person has a certain creative liberty. As long as he doesn’t do something which is impinging on national security, or does not promote violence.
Thapar: So, three quick questions about Padmavati. When, politicians or civil society groups demand the film be banned, or extensively change before it’s released, and they haven’t even seen the film and they don’t have an accurate idea about its content, is that a legitimate demand, or is it just far-fetched, exaggerated and ludicrous?
Chidambaram: I think you’ve answered it to yourself in your question. I think the first group should see it, is the Central Board of Film Certification.
Thapar: A second question, practically every credible historian of medieval India has gone on record to say – Harbans Mukhia, the doyen of them in particular – that Padmavati is not a historical character. No lady of this sort ever lived. The story of Padmavati is in fact based on a Sufi poem by the Muslim poet Jayasi, written in the 16th century, some two and a quarter centuries after this supposed event or story is supposed to have happened. And yet, Sanjay Leela Bhansali is being accused of historical distortion. Padmavati is clearly either a literary character, or a cultural myth. She’s not a historical reality. So how can her story be considered historically distorted?
Chidambaram: I don’t know, I mean, I don’t know the history of the characters, nor have I seen the movie. I am not a student of history of that part of India.
Thapar: Now today we have reached a situation where the chief minister of Madhya Pradesh has gone on record to refer to Padmavati as rashtra mata, mother of the nation. Four BJP states, Uttar Pradesh, Madhya Pradesh, Rajasthan and today Gujarat, decided that they won’t let the film be screened. And it hasn’t even got a CBFC certificate as yet. How do you as the former home minister respond to politicians speaking and behaving like this?
Chidambaram: Well, I think it’ll find its way to the courts after the CBFC certification, and, I am sure, one or the other will have to go to court. And I think the court will sort it out.
Thapar: But is it fitting for chief ministers to pronounce on a film they haven’t seen? And to say that they’ll ban it before it is given a certificate? I mean, is that a proper role for a chief minister?
Chidambaram: It’s not appropriate for anyone to censor the film in his own mind and ask for a ban unless he sees the movie, and in any event, that judgement has to be made by the CBFC. It can’t be made by, the chief minister of a state, or for that matter, any other person.
Thapar: The sad part is that it’s not just BJP chief minister who’ve been saying these things. Your colleague Amarinder Singh, the chief minister of Punjab, and a reputed military historian in his own right, has gone on record to say of the directors and the actors of the film, they are distorting history, no one would accept distortion of history. But he hasn’t seen the film, and Padmavati has, Harbans Mukhia has said, and he is the doyen of medieval historians, isn’t history, she’s a creation of poetry.
Chidambaram: Well I don’t know, I answered that question earlier. I don’t know the facts of the movie, nor do I know the history that you referred to. But, if Captain Amarinder Singh has said you should not distort history, if the historical fact is established, obviously you should not distort history, you can take a few liberties but you can’t distort history. But I don’t even know the history of the story you are talking about.
Thapar: In fact the truth is, Padmavati is not history–
Chidambaram: Well I don’t know, I said.
Thapar: She’s a literary creation. Hasn’t Captain Amarinder Singh embarrassed you in the party by speaking out? He’s aligning with the BJP by taking a bizarre position.
Chidambaram: Well, I don’t think he’s aligning with the BJP, I think his statement is qualified. I am not defending it, or I am not criticising it. I think he says you cannot distort history, I mean as a normative statement that is unexceptionable.
Thapar: Except he’s saying they are distorting history, meaning the directors and actors.
Chidambaram: Well, I don’t know if he’s seen the movie, I don’t know.
Thapar: He clearly can’t have.
Chidambaram: I don’t know. The movie has been privately screened, I believe for people. I wish they had screened it for you and me.
Thapar: Let me put it like this: other than a passing comment being made by Shashi Tharoor at the Mumbai Literary Festival, not a single leading Congressmen has defended the right of a director, to make a movie about Padmavati, as he wants. On this critical issues, shouldn’t the Congress have spoken out?
Chidambaram: No, not necessarily, a party need not speak on everything, number one. Number two, unless somebody sees the movie, I don’t think you can comment one way or the other. And if, as you believe and I believe, no one has seen the movie, then why comment on it?
Thapar: It’s not the movie we are commenting on, we’re commenting on the right in a democracy of a director to portray a historical character as he deems fit.
Chidambaram: Again you are making assumptions, and I have answered this half a dozen times. I don’t know the historical facts that you are referring to, nor do I know the facts of that movie.
Thapar: It’s not the movie, I am making a broader point. Yours is a party that is proud of its liberal traditions, you claim to be more liberal than the BJP.
Chidambaram: Of course we are.
Thapar: We are talking of a fundamental issue in a democracy, freedom of speech and freedom of expression.
Chidambaram: No, no, I think somebody from the party has made a statement that people cannot ask for banning movies without seeing the movie.
Thapar: And yet your chief minister in Punjab has actually the people of distorting when he hasn’t even seen the film.
Chidambaram: No, no, I have answered the question, you are repeating yourself.
Thapar: Can I put it like this – many in India would be reassured, if Sonia or Rahul Gandhi would’ve spoken out in defence of the freedom of a director. Not the movie, but the principle. But they are silent, and when they are silent, people say they are worried they are going to lose the support of Rajputs in votes–
Chidambaram: No, I don’t think you should link everything to voting and votes. The party’s spokesman has said no one should ask for a ban of the movies, without the CBFC certifying it. And I think that’s an adequate position for the party to take at this stage when the movie is not public yet.
Thapar: I take the point you are making, yet I remember in 2008 when Maqbool Fida Husain had to leave India, he publicly told the New York Times he’d done so because he wasn’t confident the Congress government of the day, which was your government, would protect him. In 200–
Chidambaram: Protect what?
Thapar: Maqbool Fida Husain. He left the country and told the New York Times he’d done so because he wasn’t confident the Congress would protect him. In 2012, when Salman Rushdie was invited by the Jaipur Literary Festival, the Rajasthan government, which was your government, advised him a) not to come and then they b) advised him, not even to do a video link. And people say, on these critical issues of freedom of expression, Congress may claim to be more liberal, but at the end of the day, they are as pusillanimous as the BJP. There’s no real difference.
Chidambaram: No, completely wrong, I don’t know the first case you are talking about. I know the Salman Rushdie case, he was, I think he later came.
Thapar: He didn’t come.
Chidambaram: Or he came on another occasion.
Thapar: He came much earlier. But for the Jaipur Literary Festival he was advised by the Rajasthan government, a) against coming and b) [against] even doing a video link. In the end, he had to do an interview with NDTV, outside the Jaipur Literary Festival, to talk about the fact he’d been denied even permission to do a video link.
Chidambaram: No, I don’t know, who advised him, or who took that decision from him. Our position is that creative writers, authors, filmmakers have a certain freedom, which is nearly absolute. As I said a very narrow qualification is permissible under law. And, for example, in the Peramai Murugan controversy, I took a public position, that he was entitled to write what he believed was right and his book should be published, and I even said that when he announced that he will no longer write, I said that is unfortunate, he should write again.
Thapar: Except that, that was a position you took as an individual, and you’re a leading member of the party, but your party, was silent!
Chidambaram: Well, this is quibbling. If I take a position, obviously it’s an individual’s position, and you won’t then attribute it to the party, which is okay. But when Captain Amarinder Singh takes a position that becomes a party’s position. I think we should close this subject.
Thapar: One last question, one last question–
Chidambaram: We are, we are, we are just going over the same thing again and again.
Thapar: On an issue which is become a litmus test of India’s democracy today, it’s attracting enormous attention not just at home, but. Shouldn’t Rahul and Sonia Gandhi have voiced defence of the principle, not the film, but the principle?
Chidambaram: I don’t think it’s necessary, for, on every subject for the Congress president or the Congress vice president to speak. Has the prime minister spoken? If anything, the person in authority must speak, not persons in the opposition. The point is, the Congress party has clearly said, that calling for a ban on the film even before the CBFC has looked at it is wrong. And that I think is adequate, given the circumstance.
Thapar: Alright, let’s come to our second subject. It’s now absolutely clear that by early December, either the fourth or the tenth, depending upon when it happens, Rahul Gandhi will be the new Congress president. And he takes over at a time, when your party’s political fortunes are at their lowest ebb. You have 44 seats in the Lok Sabha, you command just six states at the moment, one of which is the Union Territory, one of which you could lose if you lose Himachal, in a couple of weeks’ time. What qualities does Rahul Gandhi have to reverse the tide?
Chidambaram: You see the party accepts him as a leader. As long as the vast majority of Congressmen and Congresswomen accept him as a leader, you as a private citizen can criticise the choice but you have really no role in making that choice. The party makes that choice. Why does the Samajwadi Party elect Akhilesh [Yadav] as a president, why does the Bahujan Samaj Party elect Mayawati as the president? These are matters for within the party. Now the party elects him, the party believes that he can revive the party he can lead the party to–
Thapar: I wasn’t criticising the decision–
Thapar: I was asking what qualities does he have that lead you to believe–
Chidambaram: I think, I think it’s important that he represents another generation of Congress leaders, among them there are Jyotiraditya Scindia, Sachin Pilot, there are many others. He represents another generation, and I’ve said this for the last what, six-seven years. It is a time to handover the torch to the next generation, which is what we are doing. How that generation fulfills its responsibilities we’ll have to wait and see. But I think he is matured, he reads quite extensively, he assembles groups of people and hears them out, ask them questions. Very recently had 50 or 60 field level research persons from the CMIE, the Centre for Monitoring Indian Economy. He meets with groups of investors, meets with other thinkers-writers and I think every day he is learning and gaining more, and we believe that he has the qualities to lead the party.
Thapar: I accept that Rahul Gandhi after his trip from America, is a reinvigorated personality.
Chidambaram: Well I think, I think you have rediscovered him.
Thapar: And I accept that he represents the younger generation and the generation change is due. But he doesn’t at the moment have a strong winning political message for the Indian people. Nor does he have strong state-wise leaders or a strong state-wise organisation to match the BJP. Would you accept–
Chidambaram: What you’re saying is nothing new–
Thapar: But are those two gaps that need to be urgently filled–
Chidambaram: What you are saying is nothing new. I’ve always said that the Congress party’s weakness is the organisational weakness. You must look at blocks. Those are the key units of a party at the block level, in the municipal towns it’s the ward level .There are gaps there. We are focusing on those gaps, we are filling those gaps, we are building those blocks. The organisation must become strong. Without a strong organisation no leader can deliver in an election. I hope that the organisation will become strong, he’ll you pay more attention to the organisation.
Thapar: He’s got 18 months in which to do it before the next elections.
Chidambaram: Well, 18 months in a sense is short, in a sense is long enough. If the people warm up to a party, the party gets energised. If the party gets energised, more people warm up–
Thapar: But the words that were critical, what if the people warm up. He’s had three and a half years of it and he hasn’t built the block. If now you’re depending on people warming up–
Chidambaram: If you don’t see the change that is taking place or has taken place over the last two-three months, I think you’re out of touch.
Thapar: Let me put to you two concerns people have. One, what happens to the old guard when Rahul Gandhi and the new generation takes over? I’m talking of people like Ahmed Patel, Janardhan Dwivedi, you, Digvijay Singh, Kamal Nath. What happens to all of you?
Chidambaram: Nothing happens to us, we remain Congressman. I’m very happy. I will continue to write, I will continue to speak, I will continue to advise.
Thapar: Will you, will you and Janardan Dwivedi and Ahmed Patel have critical roles to play?
Chidambaram: I don’t know that’s for the Congress president to decide, but I’m sure–
Thapar: So there are question marks hanging in the air?
Chidambaram: No question mark, question mark is in your mind. He will use the talents of everyone.
Thapar: As he sees fit?
Thapar: Or if he doesn’t see fit, he won’t.
Chidambaram: What kind of a question is this? “Have you had a baby? Yes. “Is it a boy or a girl?” It has to be a boy or a girl, na? Either he sees fit or doesn’t see fit. What kind of question–
Thapar: Except for the fact that there could be a lot of talent that he may not use and that would be the disadvantage of the party.
Chidambaram: These are judgments that are made. If you are the president of a party, we have to defer to your judgment.
Thapar: Another critical concern people have is how will Rahul Gandhi, given the age difference, relate with allies like Sharad Pawar or Lalu Yadav, or Deve Gowda, or even, Mamta Banerjee and M.K. Stalin?
Chidambaram: Rajiv Gandhi was 40 when he related to political party leaders much older than he–
Thapar: But he didn’t need allies as critically as Rahul does today.
Chidambaram: He didn’t need, he didn’t need allies for the election that he contested in 1984, but I think in 1989 in one or two states he did forge alliances. For example in Tamil Nadu. Therefore–
Thapar: And you are saying what Rajiv did Rahul can do as well?
Chidambaram: No, no nothing to do with the age, nothing to do with age differences. It’s not as though leaders of allied parties must belong to the same age group. You can have a younger leader–
Thapar: But you are confident he can get on with people who are much older and may look upon him as an inexperienced young person?
Chidambaram: Well is not really an inexperienced young person, please understand, he’s 46-47 years old. At 47 people become, people have become president of the United States, so people will learn to relate to the fact on the ground. The fact is, that he if he becomes Congress president–
Thapar: Why do you say “if”? He will
Chidambaram: Well, he has to file his nomination first.
Thapar: But what you’re saying is when they see his Congress president, their attitude will change because the role that he will be in will change the way they perceive him?
Chidambaram: Don’t, don’t people deal with MK Stalin now, now that Mr Karunanidhi is no longer active? Did not people deal with Jayalalitha after MGR passed away? I think these, did not people deal with Mamta Banerjee?
Thapar: So position changes the person and how you perceive him. Let me put this to you, when he takes over, Sonia Gandhi would have stepped aside. She’s been the longest-serving Congress president–
Chidambaram: You seem to be privy to information which I am not privy to–
Thapar: Well, she stepped aside as Congress president,
Chidambaram: Well I don’t know, let’s wait for the nominations. Let’s wait for the nomination to be made first.
Thapar: But Mr Chidambaram, with a smile on your face you’re suggesting that if she doesn’t step aside as Congress president, or Rahul does become president they could be dual presidents together?
Chidambaram: You are, you are, this is flight of fancy. All I’m saying is, we have announced the schedule for the election, it is widely expected that Mr Rahul Gandhi will file his nomination on the first. If you ask me this question this second I can answer.
Thapar: Your language is raising doubts in people’s minds–
Chidambaram: There’s no doubt, the doubt is in your mind.
Thapar: When you say widely expected, it’s just, it’s possible he may not file his nomination.
Chidambaram: The doubt is in your mind, there’s nobody there’s no doubt in my mind.
Thapar: And when you said Sonia won’t step aside you’re suggesting there could be a dual presidency?
Chidambaram: You are, you are quibbling, and this is the only word I can use now.
Thapar: You know all I was going to do–
Chidambaram: You are quibbling, 100%. Once he, once he files his nomination, we will know that he is the candidate for president.
Thapar: I was going to ask–
Chidambaram: And I expect him to be elected unopposed.
Thapar: I was going to ask–
Chidambaram: When he’s elected, wait a minute when he’s elected, when he’s elected as Congress president, obviously the incumbent Congress president will step aside.
Thapar: The question I was going to ask, and unfortunately you didn’t let me finish, is what will Mrs Gandhi’s role be thereafter? Will she disappear into the background?
Chidambaram: Of course she won’t, why would she disappear into the background?
Thapar: So what role will she play?
Chidambaram: When one Congress president takes over, the previous Congress president doesn’t disappear. In the history of the Congress there have been many many ex-Congress presidents who continue to play an active role. The obvious example, the recent example was Shankar Dayal Sharma.
Thapar: That was a long time ago. Since Indira Gandhi in 1980, you haven’t had ex-Congress presidents after her. Indira Gandhi died a sitting president, Rajiv Gandhi died a sitting president. Sonia Gandhi took over. There was Narasimha Rao who disappeared into the background there after. Sitaram Kesri died pretty soon.
Chidambaram: Please understand that there was Shankar Dayal Sharma, ex-Congress president. He was very much alive–
Thapar: Of a much earlier vintage–
Chidambaram: No, no, we are talking about after Indira Gandhi passed away. Shankar Dayal Sharma, an ex-Congress president was there, very much there. Narasimha Rao was there, he ceased to be Congress president. Sitaram Kesri was there, he ceased to be Congress president. We’ve had ex-Congress presidents continue to play a role. And I have no doubt in my mind Mrs Gandhi will continue to play an active role after she makes way for a new Congress president.
Thapar: Now, Rahul Gandhi’s first test, almost days after he takes over as Congress president, will be Gujarat – the BJP has ruled Gujarat for 22 years, do you share the belief that’s emerging in the press, that the ground could be shifting in Congress’s favor? Or are you hesitant to say so?
Chidambaram: Well I’ve made brief visits to Gujarat. I have noticed that the party has been energised. I noticed that there is a wind of change blowing but what would be the result of election I cannot say. I’ll tell you why. The campaign hasn’t started yet effectively, because nominations were over only yesterday. The campaign will start for phase one after the last day to withdraw. The campaign has the capacity to change the fortunes of parties. But at the moment I can say with confidence at the moment, the party is energised. On the ground, I was in Rajkot, on the ground there are people who are confident that they can win particular seats. For example, the Rajkot West seat where the chief minister Vijay Rupani is contesting, our sitting MLA in Rajkot East who is confident of retaining his seat has deliberately shifted to Rajkot West.
Thapar: And you think he can defeat Rupani?
Chidambaram: He says, “I will defeat Rupani”.
Thapar: And you believe that?
Chidambaram: Well, I can only report what he said, how do I believe or disbelieve him.
Thapar: Let me put it like this–
Chidambaram: He could have easily retained Rajkot East.
Thapar: So this is a sign of confidence?
Chidambaram: It’s a sign of confidence, which pleasantly surprised me.
Thapar: Let me put it like this, many people say one of the reasons why Congress is confident this time around is because you hope to have the support of Hardik Patel and the Patidar Association and today, Tuesday, Hardik Patel held a press conference where he said two very important things. First of all he said that Congress has assured him that they will carry out reservations under Article 46, protected by Article 31. My question is a simple one, you’re a lawyer – how confident are you that such reservations which would exceed the 49% ceiling of the Supreme Court, won’t be struck down as unconstitutional? In other words, are you, as Arun Jaitley said this afternoon, fooling Hardik Patel and fooling the Patidars by this promise?
Chidambaram: I thought fooling the people with promises is the hallmark of the BJP. They fool the people when they said that they will put 15 lakhs in everyone’s accounts. They fool the people when they said they will create 2 crore job opportunities a year. So let’s leave out hard words.
Thapar: Those were his words.
Chidambaram: I know, that’s why I said let’s leave out hard words. They break no bones anyway. The point is, Mr Kapil Sibal has studied the matter and he’s come up with a possible solution to the 50% cap imposed by the Supreme Court. I haven’t studied it in great depth but he shared it with me I think it’s feasible. And for a lawyer when you attempt a new argument, you have to believe that that argument can succeed.
Thapar: Well, you have to believe it to convince Hardik, but the problem is that the most important thing at this point is getting Hardik on board. Has Hardik, as Arun Jaitley says, been misled by your confidence?
Chidambaram: No, I don’t think so. I think they have spent hours discussing it and I’m sure they must have looked at the pros and cons, and they must have been convinced that this is doable.
Thapar: Let me quote Section 46–
Chidambaram: Article 46.
Thapar: Forgive me, it says, “The state shall promote with special care the educational and economic interests of weaker sections of the people” and then it goes on to say “in particular Scheduled Castes and Scheduled Tribes”. Your hope is that the Supreme Court will say extending it reservations beyond the 49% ceiling is justified and legitimate because it promotes with special care, education and economic interests of weaker sections. That’s the only hope you have.
Chidambaram: Well, that’s not an only hope, that’s a very strong hope. When [Nanabhoy] Palkhivala argued that the basic structure of the constitution cannot be amended, there are a lot of people who said, “What is this basic structure?” He was putting forward a novel argument, novel at that time, but today it’s widely accepted that basic structure cannot be amended.
Thapar: This is a similar novel idea.
Chidambaram: It is there in article 46. A Constitution is a living document–
Thapar: Except this is a directive principle and it’s not necessarily binding.
Chidambaram: But please understand there’s another article which says the state shall take every effort to give effect to the directive principles of the Constitution and laws which are made to give effect to directive principles of the Constitution have been held to be reasonable laws.
Thapar: Can I put it like this? This is an interpretation, possibly a gamble, it’s not a certainty you can get away with it?
Chidambaram: Listen, I don’t, I’m a lawyer, I don’t think any argument is a gamble. An argument has to be formulated, reduced to a legal proposition, supported by precedent and other legal principles and presented to a court. You don’t call that a gamble, you call that the ability to put forward an argument in support of a case which you believe is a just cause.
Thapar: Except just a week ago, the Rajasthan High Court struck down Vasundhara Raje Scindia’s attempts to extend reservations beyond 49% for the Gujjars.
Chidambaram: That was an interim order, it’s not a final judgement.
Thapar: Your attempt to do much the same in Andhra was struck down both by high courts and Supreme Courts.
Chidambaram: I don’t think we took resort to Article 46–
Thapar: That’s the novelty, which is why I say it’s an interpretation and a gamble.
Chidambaram: Obviously, law is interpretation.
Thapar: Everything hinges on the Supreme Court–
Chidambaram: I reject the argument it’s a gamble and I think you should take back that word. That’s not the way law functions, that’s not the way arguments are presented in court–
Thapar: It’s an innovation that you’re trying–
Chidambaram: It is a living document, there is an article, articles are interpreted from time to time, we are interpreting Article 46 and it’s a very possible, plausible interpretation.
Thapar: How confident are you as a lawyer, not as a Congressman but as a lawyer that you can pull this argument off?
Chidambaram: Again, I reject these words, “you pull this argument”, those are, those are words which you should use in a racecourse and horse racing. Point is, there is Article 46. Mr Sibal has studied it, had great in great depth he shared it with me and I think it’s a very plausible argument.
Thapar: One more question about Gujarat, before I go to another subject. On Monday, Sonia Gandhi said, with great criticism of the government, that they were sabotaging parliament on flimsy grounds because the government hasn’t so far announced the dates of the winter session. But the truth of the matter is that even your government from 2004-2014 on several occasions delayed sessions.
Chidambaram: No no no no, tell me the dates–
Thapar: I’ll give you the dates, in 2007 the monsoon–
Chidambaram: The dates came out in the paper today–
Thapar: Can I, can I give you the dates?
Chidambaram: All but one case, in all but one case, if I remember right, the session started in November on some day to November.
Thapar: That’s the winter session, I am talking about the monsoon session. Can I, can I give you the winter, monsoon session dates. On three consecutive on three years, you were late in calling it. In 2007, the monsoon session, which is normally called in mid-July, didn’t happen till 10th of August. The reason given was the fact you were waiting for the Japanese prime minister to come to address the house. In 2008, after two days of meeting in July 21- 22, parliament didn’t meet till October, and the explanation given was that the prime minister would be abroad for much of the in-between time. In 2011, again the monsoon session, which should have been called in mid-July, didn’t start till the first of August and in Indira Gandhi’s time–
Chidambaram: July and August, are not the kind of–
Thapar: 14 days, 15 days late–
Chidambaram: The point here is that–
Thapar: What about 2008?
Chidambaram: You could have called the session, you could have called the session on the 15th of November and had a session for seven days or 10 days, what is the difficulty?
Thapar: When Indira Gandhi was in power, as Ravi Shankar Prasad has made clear, once called the winter session after Christmas.
Chidambaram: Which year was this?
Thapar: I don’t remember, he’s gone on record–
Chidambaram: Well, I don’t know.
Thapar: He’s gone on record, it’s in the Hindu today–
Chidambaram: No, I don’t know–
Thapar: Chandra Shekhar, which you supported, he says did the same thing, called the winter session after Christmas.
Chidambaram: Well, Chandra Shekhar’s government, and I think by then, mister whoever was there, we decided to withdraw support. So Chandra Shekhar’s government virtually lamed that government. And they had to call a session I think to fulfil the six-month rule. We are talking about–
Thapar: The winter session of the Chandra Shekhar government happened in December, and you were very much supporting it and you only pulled support in March the next year. When the winter session was delayed you were fully behind him.
Chidambaram: You should ask Mr Chandra Shekhar’s party, not me.
Thapar: What about Indira Gandhi?
Chidambaram: I don’t even recall that, all I’m saying is they had an opportunity to call the session.
Thapar: I’m simply saying this, when Sonia Gandhi accuses the government of sabotaging parliament because they’ve delayed calling the winter session and there are so many instances where you delayed calling the monsoon session and Indira Gandhi also–
Chidambaram: Not so many instances,
Thapar: I am saying this is the case of the pot calling the kettle black.
Chidambaram: You have given me exactly one instance.
Thapar: Three. 2007, 2008 and 2011. And Indira Gandhi before that.
Chidambaram: Nobody is questioning a delay of a few days. You are talking about delay of a few days those are not–
Thapar: 2007 was from mid-July till 10 August, that’s almost a month.
Chidambaram: That’s what I’m trying to say. A monsoon session starts in July and ends in August, if it starts a few days late and ends a few days late I don’t think that’s an issue. The point is, there was a clear opportunity to call this session in the first week of November or second week of November. If the elections in Gujarat effectively the campaign starts sometime on the 24th, or something like that. So you had a good 10-15 days in November in which the session could have been called. If you wanted to break it into two sessions that could have been done also, you could have called one part of the session and given a break and then reconvened again. The point is why do you allow almost the whole of November to go without calling it?
Thapar: But is this sabotaging parliament, Sonia’s words?
Chidambaram: It’s not sabotaging parliament, you are again…
Thapar: She called it that.
Chidambaram: You are not understanding the argument she’s making. You don’t want to call a session before the Gujarat election because you will be asked questions on a number of issues which have a bearing on the Gujarat election, so you want to avoid debate. You want to avoid questions, which will have a bearing on the Gujarat election. If the Gujarat election–
Thapar: And that is tantamount to sabotage?
Chidambaram: That is tantamount to hiding from the opposition, hiding from the opposition’s questions and trying to avoid answering those questions. If you are absolutely confident you could have called a session for ten days had a debate on a few issues and then adjourn the house.
Thapar: Alright, let’s at this point, switch from political issues and social issues to economic issues. There are two in particular that dominate the news even though they are old. The impact they’ve had hasn’t gone away. I’ll start with demonetisation and then I will come to GST.
The government has identified three areas where they believe demonetisation has brought substantial gains. As a former finance minister I want to take you through each of them one by one. First of all, the finance minister says that all the unaccounted money has now been banked. After the government has identified what portion is black, it will be taxed, possibly penalised and there will be substantive gains to the exchequer.
Separately, Surjit Bhalla, now a member of the prime minister’s Economic Advisory Council has gone on record to say that in the first year alone, the gain could be Rs 2.5 lakh crore, and subsequently the gain will be Rs 1.5 lakh every year in perpetuity. Do you buy that, or is that exaggeration?
Chidambaram: Pipe dreams, these are all pipe dreams. This was not the stated objective of the government. The government’s stated objective is one that the attorney general told the Supreme Court Rs 3-4 lakh crore will not come back to the Reserve Bank–
Thapar: Four-five actually.
Chidambaram: Well, whatever. That’s a huge amount, and that is a gain to the government. When that went up in smoke, they’ve come up with this completely opposite argument, well everything has come back and that’s again. If four to five lakhs did not come that would be a gain if everything came back, that would be a gain. I mean who are they making a fool of?
Thapar: Do you believe that they can identify it as black and tax it?
Chidambaram: As I have said repeatedly, until the process of adjudication, appeal, the second appeal is completed, the money that has been exchanged in the bank and sitting in a bank account is legitimate white money. The money has been exchanged, until it is proved to be unaccounted money, liable to tax, the money is legitimate money of the account holder.
Thapar: So this will take years–
Chidambaram: Oh yes, this willone Because the capacity of the income tax department, we know they do not have the capacity to process the 1 lakh notices that they threatened to send out. And if they send out anything more than one lakh, I will conclude that they are fooling the people.
Thapar: So this is why you call this a pipe dream?
Chidambaram: Absolutely. And where will, what is this, Surjit Bhalla’s calculation of 2.5 lakh crore a year and 1.5 lakh crore in perpetuity? Where do you get these numbers from?
Thapar: In other words you’re suggesting he’s virtually cooked them up.
Chidambaram: I’m not saying he’s cooked him up, he’s a reputed economist. I just happened to disagree with him, that’s all.
Thapar: The second big gain the government says, is to do with the cash to GDP ratio. The finance minister has gone on record to say that the cash to GDP ratio has fallen from 11.3% to 9.7%. Separately, in an essay put on his blog he said that the reduction of currency in circulation is of the order of 3.89 lakh crore. And the Business Standard has said, in one of their leaders, that digital transactions have increased year on year by 41%.
Chidambaram: Who said? Which textbook says a lower cash to GDP ratio is good and a higher cash to GDP ratio is bad?
Thapar: So the government’s assumption itself is fallacious?
Chidambaram: Which textbook says that, which economist has said it? How much cash there should be in an economy to keep the wheels of an economy moving is what we call money supply, and that is a matter that should be determined by the Reserve Bank of India. The government has no business saying what shall be the level of money supply.
Thapar: So in claiming that the fall in cash to GDP ratio there’s been a gain the government is wrong because their assumption is fallacious to start with?
Chidambaram: It is one of the reasons why demand is lower, because the cash to GDP ratio is perhaps not sufficient to sustain a 7-8% growth.
Thapar: So far from this being a gain, this could be one reason why demand is falling/
Chidambaram: It is, it is one of the reasons of that I’m clear. How much impact it has I can’t say. It is one of the reasons that maybe the cash in circulation is not enough to sustain high growth.
Thapar: So on both these counts, which the government claims as gains you’re saying one is a pipe dream and the other could actually be one of the reasons why economic activity has slowed down. In any way the assumption the government is basing its argument on itself is unproven and wrong.
Thapar: Let’s come to the third big gain the finance minister talks about. Once again in the essay put up on his blog, he said that the number of individual income taxpayers had gone up by 56 lakh since demonetisation. He said the year before, they had only gone up by 22 lakh, so this he was claiming was an increase of over a 150%, and separately, the Indian Express has said that if you include people who filed returns but didn’t pay tax as well as those who paid tax but didn’t file returns, the increase is not 56 lakh, it’s 1.26 crore.
Chidambaram: We will wait for the end of the year number of how many people have come onto the tax base. We have had different numbers by different people, revenue secretary gave a number, CEA gave a number, finance minister gives a number. Let’s see at the end of the year how many people have filed their returns, but the number of people who file, what we call filers, has increased, I’m happy, but please remember what the CEA said, the average income disclosed by these new filers is 2.7 lakhs, which is barely above the threshold exemption.
Thapar: Can, can I give you an answer to that?
Chidambaram: Just a moment. Barely above the threshold exemption limit and obviously the revenue gains are not going to be commensurate.
Thapar: There is no doubt that this year, although the numbers filing returns has increased the actual amount of money they’ve paid is not very much.
Chidambaram: Why are they talking about–
Thapar: But once there is an amount of tax payers and the economy picks up, these people will be paying more and more. So in future years the amount will go up hugely.
Chidambaram: Well with all these great numbers, why is the government sending out signals it will not meet its revenue target.
Thapar: That itself contradicts the claim that this is a gain.
Chidambaram: Number one. Number two, there is a phenomenon in Indian tax compliance called stop filers – people who file returns, stop filing after a year or two and then we have to chase them all over again.
Thapar: So this could be a one-off.
Chidambaram: Well, that’s why I said, these are not matters where you can come to instant conclusions in a matter of three to four months. We will have to wait to see at the end of the year how many returns have been filed. We will have also have to wait to see for a year or two how many of them continue to file.
Thapar: So once again what the government claims is a gain–
Chidambaram: These are all premature claims.
Thapar: Is all premature claims and it may turn out not to be a gain at all.
Chidambaram: Well I am not wishing it turns out to be wrong.
Thapar: But that could be the case.
Chidambaram: That is the reality.
Thapar: To conclude this particular part, Arun Jaitley in that essay put up on his blog said that this was a watershed moment in the history of the Indian economy and then he added that it had ended once and for all what he called the chalta hai traditional attitude towards corruption which had prevailed in your government’s time.
Chidambaram: What chalta hai? Go to any government office, try to get a caste certificate, try to get your building plan approved, try to get your patta or sat bara change made there. A chalta hai attitude is there in every government office. It’s normal there, and I don’t defend the normal. That’s the fact. The normal is, if you want to get your work done, you have to pay money.
Thapar: And that is–
Chidambaram: Is Mr Arun Jaitley saying that all that has vanished now? He’s living in a dream world if you think is all that is vanished. It’s there, just go to any office. Come with me, come with me.
Thapar: Nothing has changed as far as grease money concerns go.
Chidambaram: That has become the normal in India and I resent it, I’m unhappy about it, but you have to acknowledge that fact. That has become the normal. Now, as far as corruption and high places is concerned, as I said when a government is an office all you hear is insinuations, some suspicion some doubts. It’s difficult to get all the facts of a case that will show up a clear case of corruption.
Thapar: You mean, when the government goes out of office then you find out about corruption in all those places?
Chidambaram: It’s only when a government’s term comes to an end, these things come to surface.
Thapar: In other words, what you’re saying is the claim the BJP made, that there’s been no corruption at the upper levels and they say that in contrast to 3G, in contrast to Coalgate, they are clean at the top. You’re saying, we’ll find out when the government goes and the books are open.
Chidambaram: No, there’s this there’s this Rafale case, and we’ve asked a question for which we are waiting for an answer for the last three days.
Thapar: Why do you believe, you brought up the Rafale case. Why do you believe that in fact there is some mystery suggesting corruption, because the plane they are buying comes priced with all the equipment, weaponry and electronics. The plane you were pricing was minus all of that. The addition makes the difference.
Chidambaram: All that we asked was in that press conference, all that the defense minister was asked was, is it correct that the price of the plane contracted by the UPA government was about 526 crore a plane and the plane that you have contracted is over 1,200 crores.
Chidambaram: To which she turned and said, “The defence secretary or the defence production secretary will you please give their numbers.” Now this was four days ago, the numbers have not been given yet. Why, if you know–
Thapar: You mean the delay is suspicious.
Chidambaram: No the delay raises further questions. Why can’t you give the number–
Thapar: But can I, can I–
Chidambaram: If you’ve got such a complete answer, complete explanation give the number out.
Thapar: I can’t answer why the defence secretary hasn’t given the number and why there’s been a four day delay. But I can point one thing out to you, which is a point made by many strategic editors, Ajai Shukla in particular, that the plane that you were pricing at roughly 500 crore, was minus electronics equipment and all the high flown equipment and technology that the Air Force has insisted on.
Chidambaram: Wait a minute–
Thapar: The plane the NDA’s pricing is with all that equipment including the Israeli headgear, and that’s why there’s a difference in price.
Chidambaram: Right, let the government say it, that the government give the break up of the price of the plane and let them also say, from the UPA’s contract, if we were buying only a shell and all this was to be an add-on, I’m sure they must have priced that before they decided to sign a contract to manufacture it in HAL. So let’s release those, release those documents as well as your documents so let’s compare the prices of the two planes.
Thapar: Can I put this to you? You’re raising a question and I presume the Congress party at the back of its mind, even if it hasn’t expressed this openly, suspects that there is something murky, something suspicious, something corrupt. Is that what you’re trying to– Do you think someone has made money.
Chidambaram: No, we haven’t said anything like that. Don’t put words in my mouth, we haven’t said anything like that.
Thapar: Surjewala, in fact uses the word murky, in his Indian Express article.
Chidambaram: Who says?
Thapar: Randeep Singh Surjewala.
Chidambaram: All that we are saying is here is a contract for an X number of planes, some will be bought, most will be made. You have got a contract for only 36 aircraft at this price. Now obviously, both can’t be right, both can’t be correct judgments. Nobody’s question at the moment is talking anything about motive. If one judgment is right, the other judgment is wrong. So let’s have the facts and the documents relating to the two decisions taken by the two governments.
Thapar: Many people fear that when Congress raised the Rafale issue suddenly they did it because this was your way before the Gujarat elections of casting mud on the government and getting even for the fact that they are always alleging that you are corrupt because of 2G and Coalgate.
Chidambaram: What mud? We are asking questions, you have the answers, share the answers. If asking questions is throwing mud this is a new–
Thapar: These are innocent questions being asked just out of curiosity? Not with an intention to try and throw mud?
Chidambaram: Are these not straightforward questions? I think they are quite straightforward.
Thapar: Politicians rarely do anything straightforward.
Chidambaram: Well I think, I think the boot is on the other leg. I think journalists rarely ask straightforward questions.
Thapar: Let’s come back to economic issues, we’ve discussed demonetisation, we wandered off into Rafale, but let’s now come back to GST.
There’s no doubt that the GST raised multiple concerns about the number of rates, about the way items fit into those rates, about the complicated procedures that the small businesses and even big businesses have to go through, and then the efficiency and functioning of the GST network. But it’s also true, that the government has made repeated, strenuous attempts to put these right.
Chidambaram: Thanks to Gujarat.
Thapar: So my first question is, today four and a half months after its launch, how do you view GST after the amendments and changes?
Chidambaram: Why is the government, why did the government scramble eggs in a particular way and trying to unscramble scrambled eggs? We could have made a proper omelet or a proper sunny-side up, isn’t it? You made a mess of it. Thanks to Gujarat elections, you are forced to retrace your steps. Which is why I say, this is not GST, what you introduced was not GST, what you introduced is your own version of a tax.
Thapar: But let me put this to you. After all the amendments and changes in rules, regulations as well as changing the level of taxation of many items, what are now the key problems?
Chidambaram: Oh there are still many, many issues.
Thapar: What are the main ones?
Chidambaram: The main one is, it’s still not a single rate. And the government is unwilling to say, after a period of transition, which I accept, it will be a single rate. GST the world over is a single rate.
Thapar: Except that the CEA talking to the Economic Times on Tuesday did suggest that it could become three rates in due course.
Chidambaram: It was always the single rate, always meant an R&R, a revenue neutral rate. An R&R minus and an R&R plus. When we said single rate, read the CEA’s report, which he gave two and a half years ago. Single rate meant, single rate was a shorthand way of saying, R&R, R&R minus and an R&R plus
Thapar: And that, that’s the first problem that needs to put right.
Chidambaram: That is the GST, that is the GST. What you have is not GST. You can call it by whatever name you want to call. GST is eventually it’ll be a single rate but we acknowledge that because of the largeness of the country, and the nature of trade and business in this country, nature of consumption, we must have an R&R minus and an R&R plus.
But as I said, in my speech in parliament, 70% of the goods and services or more should be at that R&R rate.
Thapar: This is, therefore, one issue they still need to tackle, although I’ll point out for the sake of the audience that in the interview he gave to the Economic Times on Tuesday, the CEA has indicated they’re moving in that direction.
Chidambaram: Well, why do you have to move in the direction, we could have started at that point?
Thapar: What are the other issues that need to be dealt with?
Chidambaram: The other issue is there is today a diarchy of control. Some vendors, some service providers are controlled by the state government, some are controlled by the central government, and I think they have got some kind of a division – 90-10 and 10-90, and all this is utter confusion. If you and I are in the same city, doing the same business, why should your controlling authority be central government and why should be the controlling authority in my case–
Thapar: It all depends upon the value of the transaction.
Chidambaram: There is a diarchy in control which is going to lead to utter confusion.
Thapar: That’s the second thing that must be corrected?
Chidambaram: That is a major, major thing. The third is, they still don’t seem to believe that GST is a non-cascading tax. An input credit must be given in every case. They have denied input credit. Only recently, after they reduced the GST rate for restaurants from 18 to five, they have denied them GST input credit. Now, what kind of GST are you designing? The basis of GST is an input credit will be allowed and it’s a non-cascading tax. If you deny input credit, it becomes a cascading tax–
Thapar: Which is why restaurants have introduced their prices?
Chidambaram: Well, why they have not reduced the prices may be due to many reasons–
Thapar: But they’ve said so
Chidambaram: My input prices may have gone up.
Thapar: No, no they have said specifically it’s because they’re not getting input credit. What about the matching invoice issue, is that another key issue for you?
Chidambaram: Well, I don’t know the mechanics of all that but I’m sure, lots of traders have told me that complying with the current rules is almost impossible. Which is why, when a bunch of chartered accountants and lawyers and traders went to Ahmedabad, when I was there two weeks ago, and challenged that kendra, that there was a setup or kendra to help filers, and ask those officials, “You fill out this GST form”. Not one official was able to fill the form after two hours of trying to do so.
Thapar: So to sum up your position on GST, first of all what they’ve created is not GST, secondly it’s extremely confusing–
Thapar: Thirdly, by not giving input credit they actually making it cascading rather than–
Chidambaram: There is another problem, today you have to pay and then apply for refund–
Thapar: It should be the other way around?
Chidambaram: No, the earlier excise was when you pay you take credit for what you have paid.
Thapar: This is where the matching invoice problem comes in.
Chidambaram: This is where, while imitating the excise pattern, they have distorted the excise pattern. You have to pay first and then claim a refund and the refund may come three months later, refund may not come, refund may end up in a dispute. Whereas the correct approach is, if you are taking input credit, when you pay, you must take the credit and pay only the balance.
Thapar: Mr Chidambaram let’s leave it there. A pleasure talking to you.
Chidambaram: Thank you.