- 4 hours ago
This edition of Democratic Newsroom focusses on Prime Minister Narendra Modi's recent appeal to citizens to reduce spending, conserve fuel, avoid buying gold, and limit foreign travel amid the ongoing West Asia conflict.
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00:03Good evening, you're watching the Democratic Newsroom. Welcome. We took a bit of a break during elections. We are back
00:09and the moot point of discussion this evening, Prime Ministers spend less advice. Advice on a warning of things to
00:17come. Let's open the debate and I have with me Akshita, Gaurav, Rajdeep and Siddharth Zarabi. Rajdeep, you want to
00:25go?
00:26Okay, look, what do you want me to say? I mean, the Prime Minister tells the country not once but
00:31twice that you've got to save less, don't buy gold, conserve fuel on fuel, don't travel abroad. It's a message
00:39for austerity. I mean, it's not just savings, it's austerity. And it's not just India across the world in the
00:45unprecedented global conflict, potential oil shock of a kind we haven't seen since the 70s. Many governments are saying tighten
00:52your belt.
00:53My problem is not with the message. My problem is A, with the manner in which the message has come
00:58and more importantly, the timing. I mean, for six weeks while the conflict was raging right through the month of
01:04April, what were our netas doing? Across parties, crisscrossing the country, helicopter rides, giant road shows, political rallies, LED screens,
01:15promising all kinds of freebies to people.
01:17For example, I never heard the word austerity. I never heard that this country is going, there is an impending,
01:22looming crisis. Suddenly, elections over, you've given the country a reality check.
01:28And that's why there's panic. I mean, the panic has come because the impression was we are economically invincible. If
01:36you heard my friend Siddharth Zarabi and his friends, they were saying, you know, Goldilocks moment has come.
01:42Now, suddenly, Goldilocks moment has been transformed, not because of internal reasons, but external shocks into a moment of concern.
01:49So, I have a problem with the timing, messaging. I think all of this could have been done more cooperatively.
01:55I think Sharad Pawar has got it right. Call an all-party meeting, take people into confidence.
01:59Otherwise, there's a fear factor that comes in. My friends in the market are panicking because they don't know what
02:04will happen next. They want reassurance at a time like this.
02:08I think the Prime Minister is a great communicator and I think he needs to do that. He needs to
02:12also reassure people, not just scare them.
02:14And the other little point that I want to make in conclusion is, you know, let's not, it's great to
02:19know that the Prime Minister is going to cut down his cavalcade, but let's not reduce it to optics.
02:25Let's try and make it permanent. Even if there is no oil shock tomorrow, it would be great if all
02:30our netas cut down on needless government expenditure.
02:33The government needs, austerity begins at home. Please stop telling citizens always, be obedient, stand in line for demonetization.
02:41You know, COVID lockdown. Now, tighten your belt. Please, governments have to do it. All your government servants always travel
02:48business class.
02:49Wherever you go, all the first rows are always appointed. PSU chiefs and government servants.
02:54You go to any flight, they don't want to observe austerity, but austerity for the middle class.
02:59So, I have a problem with the manner and I have a problem with the timing.
03:03I have absolutely no problem of the need to tighten my belt. In fact, I've already started tightening my belt,
03:08if you see.
03:08We've also lost a little bit of weight. I've lost a little bit of weight, so I'm tightening my belt.
03:12Siddharth, we want to come in on this. Because at one end, Siddharth, the timing would be questioned,
03:17because we're coming in the back of the blitzkrieg of elections, where mega rallies, helicopters flying about,
03:24road shows, where, forget about a cavalcade, like you had it all, all the stops were pulled.
03:28So, we're coming at the back of it. If there was a real issue, and clearly there is a real
03:32issue,
03:32with what the Prime Minister says, then why not earlier? So, the timing will be contended with.
03:37But the question I want to ask you also is, Siddharth, when Prime Minister uses COVID-like situation,
03:44when Prime Minister says, don't buy gold, don't travel abroad, this is scary.
03:48It seems that God alone knows what's coming. So, what is coming? What shall we be prepared for?
03:53Is something going to happen in the next one month?
03:56Preeti, the expanding economy of middle-aged men like me, in terms of their midriff, requires tight belts.
04:02So, I just want to say that.
04:06But, there is a broader question and a reckoning.
04:10And I would say that, we are still a Goldilocks economy.
04:14I say this not to be glib, but with seriousness.
04:17There has been a massive speed breaker that we have hit.
04:20It was not of design by India.
04:24Of our position, yeah. We have…
04:25Of not of our making.
04:26And, you know, on this forum and earlier also, we have been maintaining that,
04:31even if the crisis were to be resolved, the after-effects would be felt for several months.
04:36Now, why are we here?
04:39I don't think fuel subsidy is the bigger question.
04:44Please remember that alongside these measures, appeal for people to try and curb wasteful expenditure
04:51or needless purchase of gold, nowhere is the central government indicating so far
04:58that it will cut capital expenditure or that the welfare state, which is now at its largest ever
05:04in Indian economic history under Prime Minister Narendra Modi, in the last 12 years,
05:10we have increased the size of our welfare state by several hundred percent.
05:15And if you add states, the welfare state that India is, is now at its largest ever.
05:21And I imagine it will continue to grow as our economy grows.
05:25So, none of those cutbacks have happened.
05:28What is the…
05:29Even while our rupee has hit the lowest and…
05:31So, great point.
05:32So, I will just take 30 seconds.
05:34What is the real issue?
05:35The real issue is, I read all of this as an attempt to save or in exchange.
05:41That doesn't mean that we have a balance of payments crisis looming or this is a 1991 situation.
05:51What has happened due to other factors and that is where the government needs to act,
05:56I would say, if you talk about curbing consumption, conspicuous consumption, wasteful consumption,
06:02we need to really focus on attracting the big dollars back in India.
06:07Our capital market taxation has played a diverse role in knocking FDI investment.
06:13They are taking out more than they invest.
06:15Of course, FDI is coming in some of the big ticket deals announced in Andhra Pradesh that the chief minister
06:21there has managed to attract.
06:22Or yesterday you heard even Uber announcing a massive investment in India.
06:27All of that will work but that will take multiple years.
06:31So, acting on the rupee cannot happen through this rupee.
06:35Allow me to ask you a quick counter and then I will go to Gaurav Savant as well, you know,
06:37to explain to our viewers a larger understanding.
06:39Because we are caught as collateral in what the conflict is escalating in West Asia, right?
06:46So, if we are caught in the collateral in all of it, earlier, right before the elections, there were other
06:51countries which were taking measures.
06:53We weren't taking those measures, as hard as they were taking, to possibly counter the aftermath or the impact of
06:59the conflict in West Asia.
07:02We didn't take it then.
07:03Shall we be prepared in the next one month for it to hit it in our face and then say,
07:08oh, we've been blindsided and we've been caught.
07:10Therefore, the kind of advice…
07:12He didn't answer, by the way, your question, why didn't we do it for the last six weeks?
07:15Why didn't we do it for the last six weeks?
07:17I'm asking him that same question.
07:17I have his expenditure during the elections.
07:19The honest answer…
07:20The freebies that are being handed over by all political…
07:29Go ahead and into an election on a weak wicket.
07:33But…
07:36Just one line.
07:37One line.
07:37All parties are…
07:38I want to open the debate.
07:39One line.
07:40I want to open the debate.
07:41Let's also agree that how many elections have been conducted in the last four years?
07:45The government of the day has not increased prices in the last four years.
07:49This is not the first instance.
07:51I'll circle back to you.
07:51In fact, there was a cut in December 24th.
07:53I'll circle back to you.
07:54Is now price rise…
07:55When oil prices were…
07:56When oil prices were low, you didn't pass on the benefit to the consumer, neither in
08:00the states or in the center.
08:01Now you're passing it on to me.
08:03Let me get in Gaurav…
08:04You did say fuel prices…
08:05Will fuel prices go up right after the elections?
08:07I will ask that question.
08:08I will circle back to Siddharth on that question.
08:11Are we actually now standing on the precipice of fuel rise?
08:14I'll come back to you on that question.
08:15Right?
08:15But Gaurav, to bring you in on the timing of it all.
08:17Because you had four elections.
08:20Six months ago, you had elections as well.
08:22And right before that, before we went into this election season, we saw a lot of countries,
08:27not just South Asian countries, but European countries, put in measures to combat what
08:32they thought could be the impact of the crisis in West Asia.
08:36We didn't do any of that.
08:37We thought we were perfectly placed.
08:39Why were they doing it?
08:40We didn't quite understand.
08:40We even mocked them at times.
08:42But now we have the prime…
08:43We did.
08:44We mocked Pakistan.
08:45We mocked Bangladesh.
08:47And of course, you know, I'm not even getting into that.
08:48There have been other European countries that have…
08:51No, but you can't compare India to…
08:51Pakistan is a basket case.
08:53Allow me to…
08:54I'm talking about other European countries which did the same.
08:57Right?
08:57We are much better off.
08:58We are much better off.
09:00Okay.
09:00Like Siddharth Zaravi said, we are still sitting at, I think on the 1st of May, we were at
09:06690 billion dollars, correct me Siddharth, and in February, we were at about 728 billion
09:12dollars.
09:12So, there is no crisis of payment.
09:14We are not in a crisis situation.
09:15No, but what the Prime Minister says…
09:17The Prime Minister did not seek austerity as, you know, there was no fear-mongering.
09:22I mean, Rajdeep may have been scared and some people may have been scared.
09:25Of course, you know, there are times…
09:28Have I fear-mongering?
09:28Have I done any fear-mongering?
09:30No, no, no.
09:30I'm saying some people…
09:31You said people are scared and all of that.
09:33Yeah, that is panic.
09:34Look at the market.
09:343,400 points in 4 days.
09:36So…
09:37If that's not fear-mongering, what is it?
09:38It's panic.
09:39Allow him to finish.
09:40Allow him to finish.
09:40I'll come.
09:41The government has not said austerity.
09:43The government is saying prudent spending.
09:46As Siddharth very rightly pointed out, there is no curve on expenditure or infrastructure.
09:51If you're going to tell people in a country like India not to buy gold, that is austerity,
09:55Gaurav.
09:55So…
09:56Gaurav, can you tell me the distinction between prudent saving and austerity, please?
09:59So, prudent spending is where you…
10:01Look, if you have 100 rupees, would you rather spend that 100 rupees on gold or would you
10:05rather spend that 100 rupees prudently, perhaps food, other things that you require, college
10:10education…
10:10But because you only have 100 rupees is austerity.
10:12Well, we are not…
10:13It is austerity.
10:14We are not the world's number one economy yet.
10:15We are on our way to become number three economy.
10:18We are still number four or five depending on where you… how you look at it.
10:22So, you're still getting there.
10:23Lots of asset managers…
10:23And Siddharth will correct me.
10:24Lots of asset managers were advising people to buy gold.
10:27Correct me if I'm wrong.
10:28Because the markets were so unburdened.
10:30So, gold remains one of the…
10:32Gold remains classic.
10:33Exactly.
10:33So…
10:34But it also means, while you have your personal assets going up, the country's foreign
10:38exchange goes down.
10:39Right now, you need foreign exchange.
10:41This is not a crisis of your making.
10:43You're just grappling with this situation.
10:45Correct.
10:45And you know, it's actually a disaster if we compare ourselves to that basket case in
10:49our neighbourhood.
10:49I'm not talking…
10:50Nobody's comparing ourselves to that.
10:51But we have done so much better.
10:53We have done so much better than other countries in handling this situation.
10:57Look, even Iran.
10:58Just yesterday, Iran said, we give preferential treatment to India.
11:02India has been able to take out crude oil and gas through the state of Hormuz without
11:06paying those two million dollars.
11:08That's Indian diplomacy at work.
11:10We've been able to get it from Russia, from the United States of America…
11:13Look, where we said…
11:13…from other sources.
11:15But, you need foreign exchange for that.
11:17When you were getting it from Russia, you were getting it at a discount.
11:19You know, 45 dollars, 50 dollars, 60 dollars.
11:22Now, if it is 120 dollars, when it did, you will have to pay a little more.
11:26Okay, so where we said…
11:27Allow me to bring in…
11:27Allow me to bring in Akshita.
11:28So, okay.
11:29So, nobody's saying that we are comparing ourselves to other nations.
11:33But all I'm saying is that if the Prime Minister says what he does, are we now prepared for
11:37something worse?
11:38And maybe Siddharth can answer that question later.
11:40Are we standing at the precipice of price rise, fuel rise, which is eminent, many say.
11:44But Akshita, go ahead.
11:45Make your point.
11:45I think it's unpredictable, right, which is why the Prime Minister perhaps is issuing
11:48this kind of a warning.
11:50I sense that, you know, it's almost as if damned if you do, damned if you don't.
11:53If he didn't warn, we'd be having a debate saying, why hasn't the Prime Minister issued
11:57some sort of warning or advice to citizens?
12:00He's done it now.
12:01He's sent across a message.
12:02And at no point has he said, we're going to do something.
12:04He is advising citizens, saying, do something now.
12:07Ensure you take these steps.
12:08Maybe it leads up to something.
12:10I don't know.
12:10But maybe we're jumping the gun if he's saying that it leads up to something,
12:13because there's unpredictability right now.
12:15The other aspect of it is the timing.
12:17Rajdeep, if, and you know, the price rises, fuel prices haven't gone up.
12:22And that was one of the biggest questions.
12:24After elections, will fuel prices go up?
12:26The government is waiting for it.
12:27It didn't.
12:27What you're seeing is a warning.
12:29It's a warning and advice being issued where the Prime Minister, and I remember this,
12:33I think a couple of months ago when he spoke in Parliament, he mentioned the word COVID.
12:37And I remember everyone asking, oh my God, what is happening?
12:40What is happening?
12:40Is there going to be a situation?
12:42That was a warning.
12:42And that was just before the elections.
12:45He's issued that warning again, maybe elaborated more on what he expects citizens to do.
12:48And when Rajdeep says when the price was down, it wasn't passed on to consumers then, it's being passed on
12:54now.
12:54When the prices are up, it's still not being, it's still not being, you know, you are not paying more
12:59for your fuel right now.
13:00You don't know that.
13:02We don't know it.
13:02But if it was about timing, it would have happened by now.
13:05If it was about timing, it would have happened by now.
13:07No, it can't happen immediately.
13:10No, that was the speculation.
13:11One day after verdict, it will happen.
13:14Preeti, I don't think that we are standing on any sort of precipice.
13:19Number one, Goldilocks still remains up in the air.
13:23There is a speed breaker that has been hit.
13:25Economic decisions and pronouncements are complex.
13:28For example, we have raised duty on gold.
13:32One kg of gold for 1.5 crore now attracts 22 lakh rupees of duty.
13:38However, we have also gone down the path of free trade agreements.
13:41And by the way, the UA free trade agreement will allow gold to come into India.
13:46So, it's a question of choice.
13:49Are we standing, like I said, on the precipice of fuel price rise?
13:52Will it happen now?
13:54No, no, no.
13:55Let's be very clear about it.
13:57India's fuel pricing for decades has been subject to politics.
14:03I'll just finish.
14:04It has been subject to politics by every single administration.
14:08The BJP can blame the UPA for oil bonds and vice versa.
14:12What do we need?
14:14In a country like India, oil marketing companies need some surplus to invest and grow their networks.
14:20There is a subsidy program that is underway.
14:22That is why the first price rise in this episode in two months, let's not forget, was commercial gas.
14:28Restaurant prices have shot up.
14:29Rotiyon ke daam badh gaye hain.
14:31So, prices have been passed on, on petrol diesel.
14:34I would be in the camp to say, this was the time to pass on calibrated price rises.
14:40People will understand.
14:41So, are we also looking at very high inflation now?
14:44The WPI component of fuel is 1.92%.
14:48For CPI, it is slightly different.
14:50However, the price rises already passed on.
14:53Our indices do not capture the real extent of on-ground price inflation.
14:59I hear you.
15:00So, are things going to get worse?
15:01People just want to know what…
15:03Prices have already shot up, Preeti.
15:04I am saying.
15:05On the ground.
15:05On the ground.
15:06Is it going to be…
15:07I mean, it's a relative thing.
15:09What does bad mean?
15:09If your income doesn't increase, a hundred rupees roti is bad.
15:13But if your income is increasing, it is relative to your income.
15:16Because what is being projected is that inflation is going to really skyrocket.
15:19Preeti, I think what has really happened is that this has come out as a curb on consumption,
15:25which by no stretch of imagination, either politics or economics is good.
15:30Because a curb on consumption will lead to lesser economic growth.
15:33It will lead to lesser government revenue.
15:35I don't think that is the intent of the government.
15:38Okay.
15:38Go ahead, Raj.
15:39Look, you know, many years ago, and Siddharth will correct me as to when,
15:42there was a lot of debate over deregulating fuel prices.
15:46And the government decided to move in that direction.
15:48That's my point.
15:51Eventually, what you've decided, in a country like India, fuel is far too politically combustible.
15:56And as a result, therefore, oil marketing companies' hands are tied at times.
16:01They are tied at the moment for the last six, eight weeks.
16:03My point is, therefore, if you…
16:05I agree with Siddharth.
16:06If you took people into confidence and explained to them, they would understand.
16:10But if you suddenly come with a dhamaka, as I said, the warning should have been done.
16:16They were done before the election.
16:18You should have had…
16:20You should have laid the ground, you're saying.
16:21No, you should have already done graded price increases.
16:24Now you may get a sudden price increase.
16:26And that's what the Prime Minister appears to be preparing the country for.
16:29You're even cooking at it.
16:31And it's not just…
16:31You're speculating right now.
16:33No, no.
16:33I'm just…
16:34Look, I'm not…
16:34The Petroleum Minister has said as much, two days ago, that prepare.
16:40You've got to…
16:41Across the world prices, the United States to our neighborhood prices, global fuel prices
16:46are rising.
16:47My point is the political messaging.
16:49The political messaging should reassure people, not panic people.
16:53I always thought…
16:54One of the strengths of Prime Minister Modi…
16:56One of the strengths of Prime Minister Modi has always been to reassure people.
16:59In this particular instance, for whatever reason, it's set off panic.
17:03Gaurav, you put a question…
17:04You put a question…
17:05You put a question…
17:05I think…
17:06I am questioning the timing now.
17:08Gaurav, would you not question why is it done right after an election is over?
17:12No, no.
17:13I wanted it to happen during the election.
17:15Before it is supposed to be…
17:16Okay, one second.
17:17We have only two minutes.
17:18Gaurav coming.
17:19Make your point.
17:19Why should politics decide suddenly you're telling…
17:21Okay, one second.
17:21During the election, you're saying…
17:22Sab changa see.
17:23Okay, got it.
17:25One second.
17:25Raj Gaurav, go ahead.
17:26Make your point.
17:26You have a problem.
17:27I actually think the people of this country are fast smarter than Rajdeep gives them credit
17:33for.
17:34The people know what is good for them.
17:38When things are happening, they've voted in a certain way.
17:41Then perhaps it reflects what the people in this country think.
17:45That's point one.
17:46Point two.
17:47People are also seeing what's happening in West Asia.
17:49They read news.
17:50They watch India first and all the other shows, you know, on India today.
17:55India first talks more about Pakistan.
17:56Because…
17:57India first talks more about Pakistan.
17:59India first talks more about Pakistan.
17:59They know the real position in West Asia.
18:03The efforts that are being made, including at the BRICS foreign ministers meeting that
18:08we'll know more about at 8 o'clock tonight.
18:09So, you know…
18:11So, why did the markets go down 3,400 points?
18:13Okay, I'm sorry.
18:13Everyone was so confident.
18:143,400 points.
18:16It did spread panic.
18:17It did spread panic.
18:18I think you've got to get this right.
18:19And Siddharth can correct me.
18:20Even before the West Asia conflict, correct me Siddharth now.
18:23FIA outflows have increased.
18:25FDI was slowing down.
18:26Please answer me.
18:27I don't have any…
18:28No, no.
18:30Manufacturing was not, you know, robust.
18:32A number of leading Indian businesses have also been looking for investment opportunities
18:36abroad.
18:37FIAs were looking for other markets outside India.
18:40The capital markets were diffident post the taxation system.
18:44All of this was pre-West Asia.
18:46Correct me if I'm wrong.
18:47So, it has nothing to do with West Asia.
18:48I will simply say, Preeti, 10 seconds.
18:5110 seconds.
18:51That a lot of legwork is required on reforms, including…
18:56Yes.
18:57Including to attract foreign capital back into India.
19:01Well said.
19:02If you don't do that, this other side moving only one wheel and not the other one will
19:08not take the vehicle forward.
19:09No, but I was just reading the Goldman Sachs projection for India's inflation and it looks
19:13Barisa.
19:13At least with what the latest numbers…
19:15No, but India's done…
19:18Let's also be fair…
19:19Previous 20 years back, inflation would impact people far more.
19:24Please acknowledge that there is a huge welfare state.
19:28Yes.
19:28So, the inflationary impact…
19:30Will be less you're saying.
19:32Relatively.
19:32Well, relatively less.
19:33We'll know when it really happens.
19:35But we're going to close the debate right now only to open it up later because it's
19:38just bigger.
19:39The Prime Minister has given out advisory.
19:42This is an advice.
19:43You can hear the rest of the debate on India first.
19:46Well, for now…
19:47For now…
19:48For now you have to tune in.
19:49Where he will compare India and Pakistan and say…
19:51Okay, fine.
19:51Yeah, yeah, yeah.
19:52I just want to roll today.
19:54Fine.
19:54Okay.
19:54I'm going to just close this debate.
19:56No closing.
19:56Up next to the point.
19:57Stay tuned.
20:00Ten.
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