'Only Natural Corporate Chiefs Have A Voice On What Should Happen In India'

Sunit Arora: You have been observing public life for a long while. Do you see this as a watershed election? Or, is it just one of those regular elections?

N.R. Narayana Murthy: This election is very important because it is being held after a period of spectacular economic growth in the country. Second, it is being held when, for the first time, there are concerns about lack of inclusive growth. Even though only a certain section of India has been shining since 2000, the inclusive growth issue was not raised in the 2004 elections. Dr Manmohan Singh has brought the need for inclusive growth to the front burner. In that sense, today, there is a much greater awareness of the fact that not everybody in the country has benefited from our extraordinary economic growth. Third, there has been a re-alignment of parties even before the elections. We have seen realignment in both the coalitions -- among the parties that were together in the government, and among the parties that were together outside the government. In that sense, yes, this election is different.

In fact, if you look at media, the sense you get is that there is no debate over issues before this election.

You may have read the introduction section in the book of my speeches. There, I have talked about three fundamental tenets on which my economic philosophy is based. First is the set of values like hard work, honesty, discipline, decency, austerity and entrepreneurship to be followed by people for fast inclusive economic growth. Second is leadership by example. Third is the need for a change in the mindset of the elite in the country to relate to the reality that is India, and to desist from creating asymmetry of benefits in their favour vis-à-vis the common man. In fact, what you are seeing in the pre-election media is really the attitude of elitism. The elite in most societies including India are really not concerned about the plight of the poor people. They are concerned about what happens in urban areas, what happens in certain social circles, and what happens in circles of power. So, I am not that much surprised with what we are seeing.

What issues do you think should be debated?

The issues that we have to debate all pertain to inclusive growth. That is, we have to look at whether we are making life better for all the worlds that India is comprised of – the urban and the rural, the rich and the poor, the educated and the not-so-well-educated. We have to look at whether there has been improvement in the neglected parts of our country. We have to look at whether we have made life better for our minorities.

As you are saying, 2004 came as a bit of surprise – and in 2009, the debate about inclusive growth has become stronger and has intensified. Is that a reflection on the UPA government, which came to power on the development plank?

No matter what government has been in power, our record in human development index has been poor. We have actually slipped in rankings in many parameters. Whether you look at primary education or primary healthcare, we have really not done well. That is simply because of the elitist attitude. Most of us are have been concerned about improving the lot of the middle class, the upper middle class, the rich and the powerful. In that sense, it is nothing different. For the first time, our Prime Minister – for whom I have tremendous respect – has been trying to focus the attention of the country on the need to achieve inclusive growth. That to me is a fresh thing; a watershed phenomenon in this election.

So, if you look at the performance of the last five years, you would say a beginning has been made.

A beginning has been made. Certainly, we have articulated the problem. We have brought it to the consciousness of the people. There is a debate on this issue though it has not been a major item in the media. But I do think this will, indeed, become a front burner question. This is good for the country.

Do you have a sense of LK Advani’s views on inclusive growth?

As the leader of a major party in India, I have no doubt at all that Mr Advani too is concerned about inclusive growth in our country. Because he has been in the opposition for the last five years and because he was the deputy PM in the prior government in charge of the Home portfolio, the country has not heard much from him on economic issues. But, I am sure he will have this issue as a primary concern in his election campaign.

And the paradigm has shifted from another kind of portrayal of India’s successes – which you are very much a part of – to another kind of portrayal on what needs to be done.

I define a developed society as one where the poorest section of the society has the ability to lead a reasonably comfortable life in terms of access to education, healthcare, nutrition and shelter. In such a society, the gap between the rich and the poor must be as low as possible. I must admit that even in developed societies, that gap is increasing. However, a basic minimum standard of life needed by the poor exists there. To me, development is not about the availability of imported wine, Reebok shoes, IPods, or Iphones. Development is fulfilling the basic needs of and creating an opportunity for every citizen to improve his or her lot.

In your book you have made highly caustic remarks about conspicuous consumption, both by companies and individuals. But do you think the middle class in this country is now part of the elite?

The middle class has not yet become part of the elite. By and large, the middle class is in touch with reality. Our middle class understands the difficulties of getting permits, getting ration cards, getting admission in government schools or even paying rent. On the other hand, the elite – the rich and the powerful in our society – is insulated completely from the realities of India. The rich have completely seceded from the real India. They do not send their children to government schools; they do not go to government hospitals, and they have very little interaction with the government for services. I too am guilty in this. The powerful people use nepotism to isolate themselves from the difficulties of dealing with public systems. They get access to the best English-medium schools for their children; they get very good attention whenever they need any public service; and when they go to airports they do not go through security like you and I do. So, in that sense, they too have created a separate path for themselves within the public system.

Is not the middle class aspiring to get there, a strong body demanding its rights?

I have nothing against elitism, if elitism means meritocracy, intellectual pursuits, and the ability to influence the society for good deeds and for good causes. But if elitism translates into, as I have defined in the book, creating asymmetry of benefits for themselves as the successors of the colonisers in a post-colonial society, then there is a problem. Unfortunately, in most colonized societies, the elitists have occupied the position vacated by the colonizer in their post-colonial era, and they behave as if they are the colonisers. That is a problem. I only hope the middle class in India do not want to emulate them.

To come back to the debate over elections, another lot of issues we are seeing are communal ones – like Ram Temple – being raised. Are these the sort of issues we should be debating in 2009?

In my lecture on secularism, I have talked about how this is the time when we should stop thinking of ourselves in terms of belonging to a certain region, language, religion or caste. As long as we start finding differences among us, it is easy to divide the country into thousands of fragments at odds with each other and make it weaker. For example, I speak Kannada at home, so, I am different from you. You and I speak English, so we are different from majority of Indians. I am an engineer, so I am different from people who practise other vocations. It is very easy to create differences among ourselves, and create fissures. On the other hand, if we want to solve the problems of poverty in this country, we have to seek what is common amongst us and what unites us. And, that is why I believe secularism becomes extremely important for the country at this point in time.

What did you think of Varun Gandhi’s hate speech?

This matter is subjudice. Hence, I must not make any comments on what he said and did not say. He is a young man. He says he did not make the statement. It is for the courts to decide that issue and take proper action. If he did indeed make the statement, it is wrong. I do not think any political party must use these things for its advantage. It is not correct. However, looking at it from the perspective of an ordinary citizen, I would say that as long as people show contrition, as long as people accept they committed a mistake, and as long as people say they will not do it again, I would excuse a person who said something bad about me.

But this is a little different. If it had been a member of another community talking about the larger community…these are very sensitive issues.

I agree with you. I am not for a second condoning what he said if he indeed made that statement. I believe that we should not make this a big political issue and polarize communities. This is not the time to divide the country into those who are with Varun and those that are against Varun. His pronouncements should not become the front burner issue.

All the manifestos only talk about sops to people. Is this what people really want or expect?

There are lots of poor people in this country. As government itself has accepted, a whopping 30 per cent of our people earn only Rs 545 a month – which is Rs 18 a day. Out of this meagre amount, they have to educate their children and buy food, clothes, and medicines. Such people require help from the government. However, we have to make sure that whatever subsidies we provide to the poor people are passed on efficiently and without any leakage in the system. We can use the voucher system, first articulated by Late Milton Friedman. It is time we conducted a pilot experiment to test the efficacy of the voucher system to deliver benefits to the really poor in a direct manner in a large country like India. You talked about the NREGS. There are people who are not in a position to take part in NREGS. There are children, old people and women. Unless we can devise appropriate mechanisms in the NREGS for such people, how will they take part in the NREGS? So, it will be good to use the voucher system to deliver subsidies in food, healthcare and primary education to these poor people.

Also, economic reforms are, by and large, missing from the agenda of most parties. It is almost not politically-correct to talk about reforms.

Our politicians have a big dilemma. The economic energy is primarily in urban areas. The electoral strength is primarily in rural and semi-urban areas. If our politicians espouse the cause of economic upliftment, and focus on urban areas, they will be seen as anti-poor and anti-rural. On the other hand, if they focus primarily on rural areas, they will not be able to accelerate our economic growth. We know several politicians who focused on urban areas with the hope that they would use the benefits of economic growth coming from those areas to help the rural folks and lost elections. It is a very complex issue.

So will it mean reform by stealth? Or is it a setback to reforms?

No. It should not be reforms by stealth. Unless we can bring reforms at the state level, and unless we can bring the second-generation of reforms -- which include reforms in labour, efficiency in state administration, primary education and primary healthcare, all of which come under state-level control -- we cannot bring inclusive growth. Unless we do these, we will not be able to make a difference to poor people. For that to happen, our leaders will have to stand up and articulate the value of these reforms. They have to conduct a pilot experiment in a small place in a state. It should be a controlled experiment. All parties must come together. There should be no unending debates. Once they have seen the benefits of those pilot experiments, people will embrace them. The central government and the state governments have to come together transcending party affiliations in conducting such pilot experiments. Let us conduct such pilot experiments for two to three years, discuss the good and the not-so good coming from these experiments, correct the mistakes, and adopt it for the entire country. If conducted in a well-thought out manner, I do think it is possible to introduce reforms. If you want to do it in one shot across the entire country, we will not succeed since there are lots of fears, myths and vested interests. So, it is better to conduct controlled experiments. For example, hypothetically speaking, we can start a pilot experiment in labour reforms in Pune, in primary education in Mysore, and in primary healthcare in some district in Punjab.

For now, the economic engine of urban India is in a slowdown, while rural India is seen to be shining. How will this affect the elections?

Well, because 65 per cent of the voters are from rural and semi-urban areas, the incumbent governments will perhaps have an advantage. If rural India is shining, then the rural voters will be happy over what has happened in the last five years and will hopefully vote for the incumbent governments.

But anti-incumbency is a well-established practice in India.

Generally, anti-incumbency gains ground when people have lost hope. They will say, "I have given this party a five year chance last time. Let me give the next five years to somebody else". On the other hand, if the rural people have seen some benefits coming to them during the period since the last election, they may want to give a further chance to the same party. So, in general, if there is an overall improvement, then the incumbent government is likely to have an advantage. Theoretically, at least. Who knows? I am not a psephologist. I do not feel the pulse of the people in rural areas. So, I may be wrong.

There has been a lot of focus on corporate people contesting in this election. This would fit in with your view of getting professional leadership?

I am not, for a second, saying that all corporate people are angels. There are good people in every section of our society. But, the kind of corporate people that have shown interest in becoming independent members seem to be good people. Meera Sanyal, Capt Gopinath and Mallika Sarabhai have performed well in their jobs, are decent people, and are good citizens. It is a good sign. As long as good people from any section of the society want to fight elections, it is a good sign for the country.

Would you classify them as part of the elite, or part of the middle class?

By and large, they are part of the elite.

So, they would be at variance with your black-skin-white-mask theory.

They could be. As long as they are ready to accept the reality that is India, they are willing to work hard, and want to improve the country, we should welcome such people. The problem with most of our elite is that they sit in their big mansions, drink wine in the evening, have sumptuous meals, and talk ad nauseum about poverty. Many such people take a few random samples in the urban sections of our society and pronounce that India has indeed made tremendous progress. Yes, a certain section of India has made progress, but another important, large section of India has not made much progress.

There has been a growing corporate engagement with public life. Some of this has even boiled down to endorsements – like we saw with Narendra Modi. Why do you think this is happening?

As economic factors become more and more significant in any debate, and as the country makes noticeable progress in its economic well-being, people who dabble in these matters become important voices. It is only natural that they voice their opinion about what should happen in the country.

All this would have been already happening at a tacit level. The change I’m trying to understand is why this has shifted to the public stage…does business want to participate in a greater way in the decision-making process?

No, not really. We have come a long way from a country wedded to socialism to a country that is moving towards compassionate capitalism. Once upon a time, there was no businessman – other than JRD Tata – who could stand up and say what he thought was not right. JRD was the only one who could stand up and talk about national issues with anguish, not a voice of anger or authority. That is because all around us, we saw powerful icons of socialism, whether it was Nehru or Indira Gandhi or successive governments. Those days, poverty was a virtue, leftism was a fashion. However, we have moved a long way from there. We have seen the fruits of globalization, the advantages of entrepreneurship and the benefits of international trade. Hence, the voice of the capitalists has indeed become louder. Indeed, today, we see legitimacy for them in the society. It is a credit to various governments, both central and state.

There was a time 20 to 30 years ago when it was almost impossible for a corporate leader to meet the PM. But today, we have created a forum like the Trade and Industry Advisory Council with many corporate leaders who meet the PM regularly. And, then there are some corporate leaders who can pick up the phone and request to speak to the PM. That speaks a lot about the open-mindedness of our recent prime ministers. I am talking about Mr Vajpayee and Dr Manmohan Singh. And, of course, there are several such chief ministers. That speaks for the change in the equation that has come about. This is good. Because, at the end of the day, the corporate world has laser focus on achieving results while the government has focus on public good.