NPR, not Aadhaar, best tool for cash transfer: BJP's Sinha

"You mess up things first and then want to withdraw," Sinha said, responding to the UPA's decision that Aadhar would not be the basis for cash transfer.

Speaking on the same show, Adi Godrej, Chairman, Godrej Group, said any government which came to power should increase the ease of doing business in the country. India's ranking on this parameter has been going down in the last few years, Godrej said.

The second priority of the government should be to introduce the Goods and Services Tax (GST), which in itself would add a couple of percentage points to GDP growth. Third on the wish was reduction in various tax rates, especially in the Minimum Alternate Tax, which would be more than compensated for by increased economic activity in the country.

Godrej said too many government approvals in India were decided on a case-to-case basis, especially in manufacturing, mining and infrastructure. This trend has increased in the last few years and hurting companies in these sectors, Godrej said.

Instead, policy decisions should be taken within a broad framework as is the case in many developed countries, he said.

Godrej also said that sectors like FMCG, IT and pharma, which did not suffer from the problem of case-to-case approvals, were doing well.

On the issue of inflation, Sinha said BJP supported the steps the Reserve Bank of India has been taking to curb inflation. He said the RBI was forced to hike rates as the government had abandoned its responsibility of controlling inflation.

Sinha says he had always maintained that monetary tool was not the right tool to control inflation.

He agreed with RBI governor Raghuram Rajan's view that unless inflation was curbed there would be no growth.

"This is the vicious cycle we broke when we were in power, and will do again if we form the government," he said.

On reducing fuel subsidies, Sinha said BJP would follow a gradual approach, and was of the view that over a period of time the government should have no role at all in deciding prices of petroleum products.

Below is the verbatim transcript of Yashwant Sinha and Adi Godrej's interview with Sonia Shenoy and Latha Venkatesh on CNBC-TV18.

Latha: What would be the BJP stance on this delinking of subsidies with Aadhaar? It comes as a major shock to many of us who thought that finally at least an effort will be made to reach the subsidies to the right person. Now with Aadhaar being delinked what would be BJP or even your stance on that issue at all, will you proceed with Aadhaar and set right the legal requirements or are you abandoning it?

Sinha: We never said we are going to abandon it, we have always said that any such citizen identification process is a very welcome process. In fact you will recall that when we were in the government we had started the national register of citizens.

But I would like to make a general comment and that is you mess up things and then you want to withdraw. This has been the main feature of the UPA government. You will recall that the Aadhaar bill was introduced in the Parliament, it was referred to the standing committee on finance which I chair. It is a multi-party committee, there is a majority of UPA members in this committee. But we functioned on a non-political basis, on a purely impartial basis and the committee returned the bill to the parliament and to the government stating all the infirmities in this bill. This was done two years ago, the government has not gotten back to the Parliament with this bill, it has been lying in the limbo and there are serious differences within the government itself.

Now the problem is you are covering half the population under Aadhaar and half the population under National Population Register (NPR). How can you do it, Aadhaar is for all residents including non-citizens, NPR is for citizens. So the point is a good scheme has been completely spoiled by this government and that is the reason why it cannot be implemented in its present form and we will certainly improve it and do it, we are in favour of the NPR.

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Latha: Should we assume that you will go with the NPR and the Aadhaar will not be the basis of direct benefit? Are you going for direct benefit at all giving cash benefit?

Sinha: We are for direct benefit transfer but not on the basis of Aadhaar which is a very badly designed scheme. We will give it to all citizens of India on the basis of NPR.

Sonia: What are the reforms or wish list or hope list that India Inc has from the new government whoever comes into power?

Godrej: First of all what is extremely important is that we must improve the ease of doing business in India. As it has been historically the ease of doing business in India has been poor, we have been ranked quite low on this factor and in the last couple of years it has reduced even further. So we must improve the ease of doing business in the country.

Secondly I would strongly urge the new government that comes in to at an early date bring in goods and services tax legislation. This reform alone can add 2 percentage points to gross domestic product (GDP) growth, other things being equal, and it starts coming into existence - the growth immediately after the bill is introduced and the bill is acted upon.

Thirdly, I would urge that the new government look at several opportunities to reduce rates of taxes which can in turn not only help economic growth but add to revenues also. There are many such cases I think for example I heard that the BJP economic wing has already thought of doing such a thing. I think that could help tremendously in both improving the fiscal position of the country and stimulating economic growth. And one of them I would urge should be a reduction in the rate of minimum alternate tax because what is happening is that several stimuli provided in the income tax become not really workable because there is very high rate of minimum alternate tax now. So if all these things are paid attention to, I think India can easily get to an 8 percent plus growth rate in a very short period of time.

Sonia: Many of the BJP ruled states like Gujarat, Madhya Pradesh, Chhattisgarh have up until now been resisting the goods and services tax (GST). What is your view on whether there will be any resistance from BJP’s end or will they go ahead and follow many of the reforms that have been tabled by the Congress particularly GST?

Sinha: Adi Godrej has raised a lot of issues and let me say that the first and the foremost task of the new government should be to undo the wrongs, the excesses which have been committed by this government with the economy. And once we start undoing all of that then the economy will start moving forward. As far as the agenda set by Adi Godrej is concerned I agree with him completely, these are issues which will have to be taken up on a priority basis.

As far as GST is concerned it is entirely a wrong propaganda to say that the BJP ruled states were opposed to it. You are aware of the fact that Sushil Modi when he was in the government and the Finance Minister of Bihar was allowed to become the chairman of the empowered group of ministers (EGoM), state finance ministers by the BJP. And what was the idea? The idea was that he should be able to take forward the GST. It was part of our manifesto the last time, the manifesto is under preparation, it will be seriously considered. So to give the impression that the BJP or the BJP ruled state governments are opposed to GST is entirely misplaced and that is the first thing that I would like to challenge.

The second is as I said I am a chairman of a committee which looked at the GST after the constitutional amendment bill was introduced in the Parliament and we returned it some eight-nine months ago to this government, to the parliament with our comments and what was the attempt that we tried to make in the committee which is a multi party committee and we gave opportunity to various state governments to appear before us including Sushil Modi and represent their point of view - including the government of Gujarat and Madhya Pradesh. And we have tried to synthesis all the view and made our recommendations. Now if it is pending with the government you cannot blame the state government or the BJP for lack of action on the GST front. Certainly it is a very good move which was thought of and initiated when we were in the government, it is a matter of great pity that 10 years down the line it has not yet seen the light of the day. But we will take a view on this, we will try and promote GST.

Sonia: You said easing various hurdles that exists to do business in India. What is your primary concern, is it with respect to some of the infrastructure bottlenecks, that India is facing or some of these projects that are not getting cleared. What do you want the BJP to address if they come to power as far as infrastructure and growth is concerned?

Godrej: Too many things in India are decided by the government on a case-by-case basis, that should cease, we should have policy framework for anything whether it is infrastructure, mining or manufacturing. Policy decisions should be taken and the private sector should be allowed to move forward without case by case clearances based on that policy. This case by case working in the government which has become higher over the last five-seven years to my mind is impeding growth, progress and investment. And we must get out of this cycle as most countries in the developed world work with. You don't have to go case-by-case to the government in most cases. And if you look at businesses where there is no need to go on a case by case basis such as FMCG, IT, pharmaceuticals, I think they are doing much better than infrastructure or mining or manufacturing. So a change in that direction will help tremendously in India.

Sonia: The Supreme Court has gone ahead and given that clearance for the Mulund land, what is the exposure that Godrej Properties has over there and how much of a benefit would it be for a company like yours?

Godrej: We were part of this case in the Supreme Court, private company Godrej and Boyce owns the land - about 133 acres of our land was involved in this particular case which the Supreme Court has now ruled in favour of the applicants. We will be able to develop this, we have an agreement where Godrej and Boyce will develop all our Vikhroli land through Godrej Properties – it will be the development manager, they get a 10 percent fee for development management. Godrej and Boyce does the investment and out of the 10 percent points of fee Godrej Properties gets about 2 percent, goes into advertising and planning. So 8 percent goes into the bottom-line of Godrej Properties. So we are very pleased that this judgment has come, we will be able to develop this land in addition to other Vikhroli land which we are already developing.