Even as the monetary and fiscal policy-makers are grappling with the ‘growth versus inflation’ debate to determine India’s economic future, they should also give top priority to finding a way out of the current mess in the banking system and improve the private investment cycle.
This was the key message that came out of the session on ‘Balancing Growth and Inflation’on the second day of The Huddle, the thought conclave in Bengaluru on Saturday and Sunday. YES Bank was the title sponsor of the conclave. Former Governors of the Reserve Bank of India, C Rangarajan, D Subbarao, and former Deputy Chairman of Planning Commission Montek Singh Ahluwalia lead the discussion.
“The most important thing what we need to do is to get investments. Monetary policy alone cannot bring growth. Investment rate is falling. So we need to do a whole lot of things to bring investments,” said Subbarao during the discussion moderated by R Srinivasan, Editor,
Ahluwalia said in addition to improving the investment cycle, the banking system needs to be fixed. “There should be high priority in resolving the banking mess that has been created over the last three-four years. The banks should get back to lending. This is not a monetary policy issue. Clearly, the RBI and the government have a role since 70 per cent of the banks are still public sector banks,” said Ahluwalia.
The test
Subbarao said that the ongoing inflation targeting framework has worked well so far, but has not been tested. “The test will come when the growth is low and inflation is high. It has worked reasonably well so far, but it has not been tested. Test will also come when there is capital inflows, when there is pressure on the exchange rate. What will the RBI do then? Will it control the inflation or will it manage the exchange rate? These are the questions for which one cannot lay down the rules and one needs to play it by the ball as per the situation,” he said.
Rangarajan said that while growth is important it has to be consistent with some level of stability to make the growth sustainable. “You cannot have inflation at 7-8 per cent and then say growth is important,” he said.
China policy
In a discussion on “Asian Century: Does it have to be India versus China?” moderated by Narayan Lakshman, Associate Editor at The Hindu , Shivshankar Menon, former National Security Adviser and old China hand, was joined by Husain Haqqani, former ambassador of Pakistan to the US who is now with a think-tank in Washington, and Andrew Small, an expert on China’s foreign policy with the German Marshall Fund in the US.
India should take China’s rise as a given, cautioned Menon, and work its strategy against that backdrop, instead of looking at the relationship in binaries. “The problem,” he said, “is that we treat India-China relations as a Twenty20 match.”
Haqqani contrasted the timelines along with the two countries strategies: “If China has a 100-year plan, India needs a 50, or 30 year plan.”
Parallel cinema
Theatre, film and television actor Ratna Pathak Shah, in her session, titled Coming of Age: The mainstreaming of parallel cinema, moderated by Veena Venugopal, Associate Editor, The Hindu , regretted the fact that suddenly all that seems to represent the nation, especially outside of our own shores, seems to be Bollywood.
On the role of actors in bridging the gap between mainstream and commercial cinema, actor-director Suhasini Mani Ratnam, said it was the audience that was the key in filling up the divide. “[But] If an actor decides to support a good film, nothing like it,” she said.
Amit Masurkar, the director of the critically acclaimed Newton , spoke about how people wondered why he was making a film on politics. They had this perception that the youth is not interested in politics, while Masurkar believes politics is another form of entertainment for people.
PM vs CM
Karnataka Agriculture Minister Krishna Byre Gowda's conversation with Nistula Hebbar, Political Editor, The Hindu , on “Winning: Can the Congress turn the Tide?”, touched upon the personality contest between PM Narendra Modi and CM Siddaramaiah.
The minister argued that "Brand Modi" was already fading and that is opening up the space for Rahul Gandhi to connect better, allowing people to look at Rahul afresh.
Defence deals
Defence Minister Nirmala Sitharaman, in her conversation with N Ravi, Director, The Hindu Group, on the topic,“In defence of the realm: How prepared is India?”, tore into the Opposition's claims of illegalities in the purchase of 36 fighter jets from the French company. “I assure you there is no controversy. I (as a Defence Minister who was appointed after signing the deal) have not walked into any controversy, because it is not there ... They (opposition) just want to create a scam to equate this scam-free government with theirs,” she said.
Crafting success
In the session on "Crafting Success: The rise and rise of PV Sindhu,", moderated by Journalist Prem Panicker, the ace badminton star spoke of the intense competition each player today faces. She also underlined the importance of fitness and staying healthy.
Comedy session
The day's session ended with comedian and actor Danish Sait, who presented the talk on “Comedy is Change”. He said though his famous prank calls – made with comical accents to unwitting recipients - started as “stupid fun”, they became a platform for social commentary.
While imitations of personalities kept the audience in splits, the comedian did take a serious moment to express his concerns when asked about controversies and court cases against comedians who speak their minds. “It is they (politicians) who should be trouble. Just because people follow a comedian, it doesn't mean the comedian should not have an opinion,” he said.