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“People Think India Is a Poor Country. It Is Not”

3 minute read
TIME

When he served as India’s finance minister from 1996 to 1998, Palaniappan Chidambaram became known as a forceful economic reformer. After a stint in the political wilderness, Chidambaram returned to his old job last year in a new role: poverty fighter. He spoke to Time’s Aravind Adiga in his office in New Delhi.

TIME: You said in your budget speech that “India is not a poor country, yet a significant proportion of our people are poor.” Are you trying to redefine India’s image?
Chidambaram: Yes. A number of people both within India and abroad think India is a poor country. It is not. The bulk of India’s people remain poor because we are not able to give basic education to our children, we are not able to impart skills to our young men and women, and we are not able to get productive work out of them. If we can get another 200 million to 300 million people to join the ranks of those engaged in productive activity, India’s GDP will soar.

TIME: Your budget earmarks a lot of money to help the poor. Many Indians are skeptical that it will ever reach them.
Chidambaram: I have taken note of the skepticism. We’ll monitor not only the spending but also the outcomes. To the extent possible, I will travel around the country to see for myself what is happening.

TIME: There’s a focus on rural poverty in your budget. What about India’s urban poor?
Chidambaram: In urban areas, I believe that hardly anyone goes without food; there is always some kind of income. But their poverty stems from the environment in which they livelack of sanitation, lack of drinking water, medical care. The answer to urban poverty is to get rid of the blight of slums and build proper homes with basic facilities.

TIME: You quote Nobel prizewinning economist Amartya Sen in your speech.
Chidambaram: Sen argues that it’s growth that expands freedom. There is a belief among some sections that even with low growth, you can achieve your social objectives. I don’t share that view. Growth is paramount. As long as I keep India on a 7%-plus growth path, as long as we keep inflation within limits and do not slow down our efforts to open up India’s economy, reduction of poverty will follow.

TIME: Won’t India’s bureaucracy defeat your efforts to help the poor?
Chidambaram: It is easy to blame the bureaucracy, yet it’s the same bureaucracy that delivers in one place and fails to deliver in another. A bureaucracy is like a horse. It is only as good as the rider. If leadership is sound, we can extract results from the bureaucracy.

TIME: What role can foreign investment play in India’s efforts to fight poverty?
Chidambaram: We can learn from China that as long as we are masters of our own house, there is no reason to fear foreign investment. It can also help us devise better ways of delivering social goods such as health care.

TIME: Your budget spends on the poor without punishing the rich. Is this a sign that India has moved beyond socialism in its attempt to fight poverty?
Chidambaram: Socialist goals remain valid. What we are trying to do is devise and invent better means to achieve those goals.

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