ET Now: The GDP forecast for FY13 has been lower to 6.7% versus the earlier estimate of 7.5%-8%. Does this come as a surprise to you given the global and domestic backdrop we have been working with?
Dr. Bimal Jalan: Not really, since I do not really worry much about the second digit, whether it is 6.2%, 6.3% or 6.4%. The point is growth is sliding from what was expected earlier by the Economic Advisory Council. They have acknowledged it, which is good. They have also acknowledged that the inflation is higher and growth is lower. Now whether it is lower by half a percentage point, 2.5% or 3%, these are not the kind of issues which should grab our attention.
The big issue is growth is lower, inflation is higher and investment is also lower. I do not want to comment on what exactly the rate is -- 6.5% or 5.9% or 6.2% -- because it is not particularly important from the public's point of view. From the public point of view, the most important thing is that growth and investment need to be accelerated.
We are all talking about investment, and we want investment in infrastructure in particular. You have also heard the Prime Minister acknowledging on the Independence Day that we are not doing as well economically as we can, and that something is needed to be done, which is my primary concern as well.
What the Economic Advisory Council has said is also worth taking into account. Fuel subsidies and fiscal deficit are very important issues. They have pressed the right buttons, but I do not have any particular view on how far or how deep they pressed it.
ET Now: What is that something that you think needs to be done?
Dr. Bimal Jalan: All of us know what needs to be done. You have to restore investor confidence. Why was the same economy with the same policy growing at 9% even when the world was going down after 2008? And why are we not able to capture that sentiment for investors? This has partly to do with the policy. You announce a policy and then reverse it. We promise to do things, and then do not do it. Then there is the political issue, but where is the collective responsibility of the government? If you are an investor abroad or at home, what would you do? What is the policy? Let us get on with investments, and get away from magnified fiscal deficit, which is causing concern.
What needs to be done is known. Do it, do it collectively. We must talk less and do more.
ET Now: Is it a situation of 'perform of perish' because if the government fails to act in the next 6-8 weeks, rating agencies for sure will downgrade India?
Dr. Bimal Jalan: This is a matter of concern and there is no doubt that downgrading India is possible. If you are abroad and you are watching us, you might think why the rating agencies which were giving us the best rating in the world are now downgrading us. There is no self interest; I may not agree with this downgrading, but there is a universal sentiment now that something needs to be done. What that 'something' is, is also known. Therefore, get on with it.
India has the opportunity, talent, savings and entrepreneurial energy to be able to accomplish what it wants to do. But the political environment has to be such that people can have the confidence that the policies would remain, that we will get on with it, and that unlike many other countries, we do not have similar problems.