Demonetisation is not a radical change: SA Aiyar

Swaminathan S Ankelsaria Aiyar, a columnist with Times of India, had a conversation with economist Surjit Bhalla about developments over the last 25 years, a period captured by a compilation of the former’s columns in a book. Edited excerpts of the conversation about the book "From PV Narasimha Rao to Narendra Modi: 25 years of Swaminomics" at Times of India litfest follow.
Surjit Bhalla: Is your contrarianism because of instinct or because you reached a result?
Swaminathan Aiyar: I started being a contrarian because if I said what everybody else was saying, who would read me? In policy, when we started in 1970s, I was a socialist type.Few of us who could see the writing on the wall were honest enough to change our minds by 1980s.
Bhalla: When did you stop being a socialist?
Aiyar: It was the idea businessmen were greasy fellows and it was much better to have politicians. Remember politicians had won us independence. By late 1970s, it had become clear we had moved from greasy businessmen to greasy politicians. It became clear other countries like South Korea were growing twice as fast. Something was dreadfully wrong. Then I remember it was productivity which none of the planning documents reported. In the long run, productivity is almost everything. And public sector has no in it. You require relentless competition.
Bhalla: Have you found your praise for the judiciary as a good institution controversial?
Aiyar: Judiciary is a mixed bag. If I had to reform one thing, it would be police-judicial system. Between the two of them they have ensured nothing happens to anybody who is influential. The only arrests that take place are arbitrary arrests for various reasons.
On the other hand, the system has been successful in writ jurisdiction. You can get arbitrary actions stayed. So rule of law comes in. So, even while judicial process is slow, writ works extremely well.
The judiciary has overstepped and got into large number of areas which is partly a good thing and partly and partly a bad thing.
Bhalla: What happens in your thinking when you get things wrong?
Aiyar: People who lack confidence have great difficulty in admitting they are wrong. If you are attempting to write a column, a topic comes up 24 hours before you write it, we make mistakes. I have got things gloriously wrong.
Bhalla: On demonetization, would you change your assessment of Narendra Modi and say he is a radical reformer?
Aiyar: First, demonetization is not a radical change. It has been tried before; it did not make very much of a difference. As far as generation of fresh black money is concerned that depends on how easy it is to not pay income tax. That requires a different set of reforms altogether.