Indian Finance Minister P Chidambaram speaks to Tehelka’s Shantanu Guha Ray and Shoma Chaudhury about poverty, SEZs and the I-word: inflation
A long wait in an ante-room and then the summons. A neat man in meticulous white at the far end of a football field-size room. In a stellar career, P. Chidambaram, 62, has gone from being a left-wing trade unionist to Finance Minister, driving a globalised new economy. Inevitably, he’s in the crosshair of every major argument about the future of India. Certain of his vision, contemptuous of doubting socialist romantics, in an hour-long interview he spoke less numbers, more vision, with combative eloquence
SGR: Let’s start with what’s top of mind. Inflation. Wholesale inflation just hit a whopping 7.83 percent. Given that the tolerance level for inflation has come down in India from a time when people were willing to tolerate 8-10 percent inflation, does this put your government on notice?
PC: I’ve said this many times in the past. In the 70s and 80s average inflation was well over 8 percent, in the 50s and 60s it was even higher but since the 90s the tolerance level of inflation has come down drastically. Since the turn of this century, I think tolerance level of inflation is only between 4 to 5 percent. Therefore when the headline inflation number goes beyond 5 percent there is resentment and naturally political parties seize the opportunity to feed this resentment. We are doing everything to control the situation, but I don’t think it will have too adverse an impact on our government.
