Amartya Sen Interview, Mint
New Delhi: The public discourse surrounding his new book, An Uncertain Glory, India and its Contradictions, co-authored with Jean Dreze, has rapidly metamorphosed into an either-or growth versus social development debate, but Nobel laureate Amartya Sen argues that both are needed—and not one at the cost of the other. In an interview with Mint he spoke about the key arguments in this book. Edited excerpts:
Would it be a correct summary of your book to say this: the post-1991 discourse has largely been urban-centric and has tilted towards privatization? In part, this rush towards the market was triggered by 50 years of stagnation and a lack of hope among the educated. The book makes the case that growth without improvement in the lives of all will split the country into two very unequal halves.
This is definitely part of the story. However, privatization or non-privatization, with which you began, is not the ideal way of summarizing the debate. There is an issue of the role of the market and an issue of the role of businesses as such. The two happened simultaneously in the 1990s. The pro-market role was helpful in a way for certain sectors where privatization is important, like hotels. It brings in the efficiency of the economy by privatization. I haven’t stayed in an efficiently run government hotel yet. It is not that I am longing to stay in a hotel which is owned by a businessman; it is just that I want the efficiencies of the market to be brought into the operations of a hotel.
Expense Account, Mint
It’s been just over five months since I began doing a weekly personal finance show on Bloomberg India TV. Called Smart Money, the show is about offering strategies to people who are looking for hands-free money management. It’s for people who want to put in place a grid that they can service while they deal with flooding roads, politics at work, kiddy tantrums at home and that darn neighbour who parks in your place just to irritate you. The battle of everyday life of urban middle-class India leaves little time for goals such as everyday workouts and financial planning. The show seems to be helping for we get more than 25 to 30 mails (other than tweets and SMSes) a week sharing detailed financial information and asking for a strategy.
Expense Account, Mint
So it comes to pass that Aniruddha Bahal (the editor of Cobrapost.com, the online magazine that caught on camera bankers in over 20 banks across the country offering to launder money) is after all not blackmailing the banks. Neither, it seems, was he shorting bank stocks. The banking regulator fined 22 banks a total sum of Rs.49.5 crore earlier this week (you can read the Reserve Bank of India (RBI) circular here: http: //bit.ly/12FNP9w ), making it a total of Rs.60 crore in fines on the top Indian public and private sector banks, vindicating the Cobrapost sting. Ever since Bahal went public with his first tranche of the sting on three private sector banks in March 2013, the banking industry went overtly into outright denial and hair splitting. The more insidious part of the fightback were stories that ascribed motives to the sting operation and the editor of the online magazine. Having tracked retail banking and the rampant use of branches to mis-sell financial products for many years, I know anecdotally that there is muck at the bottom, but the sting not just brought home proof of mis-selling but showed that the problem went far beyond in a systemic way across the industry.
Expense Account, Mint
The Reserve Bank of India’s (RBI) long overdue guidelines on wealth management and distribution of financial products such as insurance policies and mutual funds by banks were uploaded on its website on 28 June. The guidelines can be accessed here:http://bit.ly/11xD6DZ and comments sent to the RBI till the end of July. The final guidelines will be released thereafter. Although RBI already has rules in place to regulate the sale of third-party products and wealth management services, these are more than 20 years old and out of sync with ground realities of how banks actually advise clients, refer and sell financial products. The new guidelines seem to be triggered by the large-scale violation of know-your-customer (KYC) and anti-money-laundering (AML) regulations by banks as exposed by Cobrapost.com in a nationwide sting (http://bit.ly/1aULAIv) that covered more than 20 banks. RBI’s internal audit showed that such violations were rampant as was mis-selling of financial products.