Jagdish Shettigar, senior Bharatiya Janata Party (BJP) leader and member of the national executive, tells Gyan Varma the BJP could agree to foreign direct investment (FDI) in multi-brand retail if some conditions are met.
The Union government has indicated it would ease some of the provisions of the Land Acquisition Bill and make it more industry-friendly by not implementing the legislation with retrospective effect, besides relaxing the requirements of consent from the landowners. The BJP wants a standing committee recommendation to be agreed on. Is there a way out of this impasse?
The solution the government is proposing is more in favour of the industry. Definitely, we are in favour of encouraging an environment that is industry-friendly. But there should be some middle ground; we firmly believe state governments should not act like property brokers. There is no doubt the constitution provides the power to state governments, to acquire land for public good; but here, the government is trying to acquire land on behalf of the private sector.
If someone wants to set up a unit, he should go to landowners. In the case of Singur or Nandigram, the then state government acted like a broker for an industrial house; that is not appropriate. When there is an increase in the demand for land, farmers should not be deprived of the benefits. Rehabilitation of farmers is another concern. There is a proposal those holding the land should be made stakeholders. Thus, farmers could be made equity holders, or their families could be given employment opportunities.
The BJP believes the Food Security Bill will add to the burden of subsidy. It will be a disaster because, with the Public Distribution System (PDS) that leaks as before, all it will cause is further corruption. What are your views?
In principle, I respect the merit behind the Food Security Bill: To give food to those below the poverty line. But the proposed Bill is not the solution; we have to overhaul the system. In the kind of society we live in, a large number are below the poverty line. We have been running the PDS to support the poor, but it is not reaching the needy. Bihar Chief Minister Nitish Kumar’s proposal to give cash is the ideal solution. Most Indians use ration cards as identification cards. They don’t use it for foodgrains. Hence, those are sold in the black market. We can’t afford this because, going by the conservative estimates, the food security required is more than Rs 1 lakh crore. For the normal PDS, the Budget estimate is Rs 30,000 crore, which gets doubled. There is a need for rationalisation of subsidy, so we can conserve valuable resources.
The BJP’s stance is it will not allow FDI in multi-brand retail, but political parties in the NDA, and some BJP leaders, are amenable to the idea. Is a rethink possible?
Definitely. In principle, we are not against FDI in multi-brand retail. It was at the end of the NDA government’s tenure that work on the draft had started. FDI in multi-brand retail is going to be beneficial to a large section of the society, especially consumers and farmers, in the long run. This also means augmenting the infrastructure, especially cold chains and refrigerator-transport systems—both need huge resources. In the NDA’s first Budget, we had announced a 100-per-cent tax holiday to those who would set up cold chains. In spite of that, the progress was not satisfactory, as we didn’t have resources of that order. Now, if somebody wants to invest in augmenting the supply chain, it will benefit both the consumers and farmers.
Under the present system, the farmers are not in a position to participate in the market. We have to ensure their benefit, and the removal of middlemen. This requires political will and I don’t blame any party. The party with which we have an understanding also has a vested interest. Look at the situation in Punjab: The middlemen have the backing of both the sides: The opposition’s as well as the government’s.
Now, we have to do two things simultaneously: One, give some breathing space to the traders in the unorganised sector; two, we cannot carry on with an inefficient system, because these people are in large numbers, and essentially form a part of all the political parties. We cannot allow this system to continue forever.
The BJP has come out in the open against FDI in the civil aviation sector; senior leaders believe the FDI would annihilate Indian airlines, both national and private. What are your views?
This again can be discussed: It is not that we are completely against private airlines. We have to patronise the national carrier, but not at the cost of a commercial business. The national carrier, and others, have to function within the realm of commercial norms. We cannot patronise the national carrier at the cost of efficiency. There has to be healthy competition among private airlines; the passengers are benefiting from competition. Till the time Indian Airlines and Air India had monopolies, flying was only for the elite, because of the prohibitive fares. In determining the FDI, we can have our own norms. We facilitated the entry of the private players — at least my impression is they (one or two) were patronised — at the cost of the national carrier. Now, this has to be debated, looked into, without any exception. Whoever was holding charge of the civil aviation sector was seen as being close to a particular airline. The clandestine associations of some (they were all linked at a very high level in the Cabinet), whether now, or in the past, in different parties, is no secret. The ownership of the airlines should also come out.
Former finance minister Pranab Mukherjee defended the retrospective amendment to the Income Tax Act and the General Anti-Avoidance Rules (GAAR) vigorously in Parliament. Within a few days of his exiting North Block, the prime minister appointed a panel to review GAAR; this is seen as watering down the proposals. Your comments.
I am opposed to any measure with regard to retrospective amendment. And with regard to bringing out GAAR by then finance minister, Pranab Mukherjee, I think somewhere he was right. When, according to the prevailing taxation law, there was dispute over the revenue due from a particular telecom operator, there was some problem with the interpretation of the law. When the Supreme Court gave judgement in favour of Vodafone, probably that provoked Pranab Mukherjee to bring GAAR. So, to that extent, I support him. But when the government uses retrospective measures, this gives undue space to the tax authorities to abuse these.
The second issue is how can those in business trust the government ? For a businessman, certainty in the business environment is a must, without which he will not invest. The fact is our industrial houses are sitting over surplus funds. The top five companies alone have surplus funds amounting to Rs 85,000 crore. They are not investing because of the uncertainty.