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‘Reforms Should Centre Around People’

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Why do you say it is essential to review the reforms conceived in the pre-Lehman period?
The reforms considered in India were based on beliefs prevailing prior to the global crisis. But now, after the crisis, there is a review of economic theory broadly on how the state interacts with the markets. So you have to look back at what you called good reforms before the crisis and see what has changed in the world, what is okay for us, and what is not.

You say the days of silos are over. What does it mean?
All over the world, there is a better recognition of importance of coordination of public policy, and the need for counter-cyclical policy to be adopted by financial sector regulators, by monetary authorities and by fiscal policy makers. If all these players are to coordinate, you can’t work in silos.

For many, reforms mean a life­style of the kind you see in the West. For some, it is also about happiness. How will policymakers address such issues?

Let us assume Delhi’s citizens want to have a US lifestyle: 1.5 cars for each family. Even now, with less than 10 per cent of people owning a car, there is no space for pedestrians to walk. And if you are to have a US lifestyle for all in Delhi, the environment will be virtually unliveable , with all the pollution. There will be only cars, and no place for people to walk. Reforms should aim for policies to increase the public welfare over the longer run also. In Singapore, for every mile you drive where public transportation is available, you have to pay a tax or fee.  In the long term, the goals of reforms can’t be about growth for the sake of growth without looking at the expectation of what constitutes a healthy and happy life.

On a personal level, what is your idea of reforms?
A college girl asked me in Vijayawada: what is the point of education if I can’t get a job? I said the question should be: Will you give me an education which will get me a job?. Reforms should centre around the people so that there is a fair chance of making a fair living without going hungry, and without being discriminated against.

Click to read the longer version of the interview

(This story was published in Businessworld Issue Dated 11-03-2013)