While the world is battling just Covid19, the Indian Economy is struggling with its burgeoning population, consistent threat of terrorism from neighbours, rising borders dispute with China, cyber attacks, and what not. Amid all this, independent journalist Mahima Sharma spoke to former IAS officer, Shri Shakti Sinha, who has served as the Private Secretary to former Prime Minister late Shri Atal Bihari Vajpayee. And Shri Sinha helped Indiastat gauge the SWOT analysis for India and how the nation must stride ahead in a better way, to overcome the above rising challenges amid unemployment in all sectors.

MS: You have served various policy-making institutions of India. In your experience and opinion, what new policies and upgrades of the older ones are needed to reverse the falling graph of its health, employment and economic scenario?

SS : The pandemic has been an unprecedented one, and though we have seen a sudden rise in unemployment, with attendant consequences for health and educational indicators, we need to understand that there is a short-term goal of coping with, and reversing, the immediate effects of the pandemic and the long-term goal of high economic growth. On the first, it is all about support to individuals and families to cope with the loss. Free foodgrains and a sharp pickup in MNREGA is part of the response. The trouble with economic policies in such continuing circumstances is that even as government revenues have been affected, the demands for expenditure and increased fiscal deficit are getting stronger. On the one hand, there is the risk of deflation, and on the other of rising inflation. I would argue that in the short-term, India has no option in stepping up expenditures, in creating demand including by putting cash in the hands of the poor. The long-term growth would require going ahead with restructuring of the economy, privatisation of PSUs, easing the microeconomic impediments to growth and investments, on the economy side, and stepped up public investments by states and the union in education, health (especially preventive side) and in improving the accountability of the health and education institutions to deliver better outcomes. An overhaul of the government machinery to make it effective, efficient and accountable would be required.

MS: Vaccine diplomacy by India and a rising need to timely vaccinate its own people. What's your take on this? How India must prioritise its public (most of which lives below the poverty line and finds it tough to afford even the basic viral fever treatment) while trying to maintain mutually beneficial international relations?

SS: While a country's first priority has to be its own citizens, in the true spirit of 'Vasudhaiva Kutumbakam' we cannot cut ourselves from the world. We should slowly restart supplying vaccines to our neighbourhood and to poor countries everywhere.

MS: Till last year, India had an edge above China due to its manpower when foreign policies changed. Then the pandemic catapulted and the masses took the worst beating. Technologically an advanced China is again trying to be back in command. What steps will India need to take to stride ahead towards its dream of being a global manufacturing leader, when so many SMEs have shut down?

SS : China was almost five times richer than India even before the pandemic, so it is not correct to say that India had an edge. While China has reemerged economically as a power house, its strategic mis-steps have meant that it is trusted even less. Irrespective of China, we have to move strongly to get growth going, attract investments so that manufacturing and employment picks up. There is no magic wand available, and I have given a broad description of the strategies we need to adopt, in the first answer.

MS: Not just economy-wise, Indo-China relations continue to be strainful due to the ongoing border tensions. What hard steps India is in a position to take right now, to enthuse confidence not just in its border forces but also the ones living on tenterhooks in the troubled regions?

SS : Our response has been robust but the problems with the People’s Republic of China (PRC) are not going away soon. PRC clearly wants the border dispute to linger; its nuclear and missile partnership with Pakistan is India-centric. The PRC feels that with the world distracted by Covid and its continuing consequences, this is the time to assert itself. Historically, PRC’s external aggressiveness is always linked to internal tensions within the Chinese Communist Party (CPC). Xi Jinping, the General Secretary of the CPC has centralised political, economic and strategic decision-making in an unprecedented way. Thousands of CPC cadres have been punished, ostensibly on corruption charges. These anti-corruption campaigns may well reflect tensions within the CPC, with a blowback against Xi’s policies. China's population has started shrinking, which means that the country may age before it becomes rich. And the tensions with India in Ladakh have shown up the inadequacies of the People's Liberation Army. At the same time, the leadership of the CPC is convinced that the West under the USA is in terminal decline, and that the PRC must now assert its leadership of the world, beginning with its neighbourhood and with Asia.

MS : Bad loans, bank frauds, easy escape by scammers to foreign shores, pending extraditions, and so on and so forth have been consistent scenarios over the last few years. Amid all this, what new laws must be framed? And till then, where do you see the future of India in terms of FDI and international investments into India?

SS: One should not link bad loans with bank frauds, though a certain overlap is there. Businesses fail, sometimes changed circumstances means that basic premises for investment are no more relevant while in others, it can be just bad business sense. These cannot be penalised. But yes, the ability of crooks to cheat the system does not reflect well on us. Our regulatory regime needs strengthening through better professionalism. It needs the ability to spot problems before they become too large and a systemic risk, e.g., Yes Bank, PMC etc. For wrong-doing, there should be certainty of punishment and an end to the culture of impunity. Government ownership of banks and insurance companies is troubling. This does not mean that privatisation alone will solve all problems, but it is the minimum required. It has to be accompanied by stronger and effective regulations, but this should not be confused with micro-management by regulators.

MS : Rising face of Taliban in Afghanistan and some very heart-wrenching incidents of violence in the region after the US announcing troops withdrawal from the nation. And, rising terror in its neighbourhood - where do you think India stands right now amid all this and tense Indo-China & Indo-Pak relations, a raging pandemic and sinking economy? And major steps need to be taken on an immediate basis so as to secure its own republic from any Taliban generated terror activity?

SS: Any rise of the Taliban to power in Afghanistan, particularly if it exercises a monopoly of violence, would not be in the interests of its principal supporters and mentors - Pakistan. It would also destabilize Iran and not be good for China. Things would not be easy for India but this is not the 1990s, and Kashmir is also different. So while India cannot be complacent, and must exercise close monitoring, it must also engage all Afghan factions India is a friend of Afghanistan, and is not in the business of choosing sides in domestic disputes. There may not be any cause for panic though.

MS : Time and again, we hear murmurs from the diplomatic circles and the think tanks, asserting one common point - India must shed its bureaucratic shackles and cut the red tape to be a better socio-economic republic. What is your take on that?

SS: That we need a new approach to governance is something that is no longer just a proposition for debate. It is impossible in reply to a question to suggest a full-fledged alternative. A few basic approaches are suggested here. Local governments (city, district, village) have to be strengthened, by giving them resources along with responsibilities. Service delivery - schooling, preventive health, water supply, etc - must be better aligned with the needs of the people and must be accountable to the local communities. Implementation, and micro-policy making must be delegated to the lowest level possible. Lateral entry must be there at all levels of the government, allowing internal candidates to compete with outsiders. Layers of bureaucracy must be reduced, and accountability norms laid down at all levels, with clear deliverables associated with each and every job. Aligning capabilities with job description and encouraging professional growth would empower civil servants and make them more effective.

MS: Coming on to the next sector of India - the power sector. It has a huge potential. But in one of your opinion columns, we read an eye opener - "Tariffs that the public pays do not reflect the true costs. It threatens the viability of the sector and bypassing the costs of today's consumption to tomorrow's consumers is unethical." Each state is making its own policy decisions, resulting in a lack of parity of power distribution as well as inconsistency in pricing across the. Don't you think India needs a uniform law? How can this situation be changed on a sooner basis? Your detailed take on this.

SS: My point is very clear - someone has to pay the costs here and now. If it is not the direct consumer or the government providing for subsidies upfront and paying for it, then it is an unfunded activity straining the rest of the system, and leaving it to the future to pay for today's consumption.This is unsustainable and unfair. I am not a great fan of a uniform national policy since local circumstances are very different. But a uniform approach, or sets of guiding approaches are required to be discussed and agreed to, based on the core principles of equity and economic viability.