:00:00. > :00:00.like to eradicate the Taliban from Pakistan. Now on BBC News, it's time
:00:00. > :00:17.for Hardtalk. A very warm welcome. A special
:00:18. > :00:19.edition of HARDtalk from India looking at the state of the nation
:00:20. > :00:25.as it gears up for national elections. Do Indians believe this
:00:26. > :00:31.vast country is on the right track to make the most of its economic
:00:32. > :00:41.potential? There are signs of change all over the city. Let's take a
:00:42. > :00:48.look. This is the shopping maul in suburban deli. A quick look at the
:00:49. > :00:54.shops and shoppers show that India have had unprecedented decade of
:00:55. > :01:00.economic growth. Second only to China. The middle class has
:01:01. > :01:07.expanded, and they have money to spend. For any international
:01:08. > :01:13.business, this represents a market that they would love to get a piece
:01:14. > :01:22.of. Describe your personal economic situation right now. How would you
:01:23. > :01:29.describe it? Good. I am doing well. I work for a British company. We
:01:30. > :01:36.have our own house and car. A lot of things depend on the elections, but
:01:37. > :01:41.the individual lives, I think they will not be affected too much. I
:01:42. > :01:48.people getting richer in the middle-class? They are. This was in
:01:49. > :01:54.the case a few years back. Real estate is on an upward trend. People
:01:55. > :02:16.are getting rich because of the properties they own. India is
:02:17. > :02:27.growing. Money is going outside. Being optimistic, I would say India
:02:28. > :02:32.will be a great country. The poor people getting poorer. Does that
:02:33. > :02:40.worry you? You are a middle-class person. It is putting a big effect
:02:41. > :02:46.on us. We are more reliant on credit cards and more in debt. Had you feel
:02:47. > :02:50.knowing that a mile or two from here, there are very poor people
:02:51. > :02:56.getting poorer, who have virtually nothing. Visit make you feel
:02:57. > :03:10.uncomfortable? Definitely uncomfortable. These people should
:03:11. > :03:20.get the ability to work. Soon there will be no middleman. Rich and poor.
:03:21. > :03:26.There is a new sense of caution even here, because India's economic
:03:27. > :03:31.growth has slowed right down. Inflation is up, and India's
:03:32. > :03:41.economic rise can no longer be taken for granted. I've travelled a few
:03:42. > :03:48.kilometres from the shopping maul, and frankly I might as well be in
:03:49. > :03:52.another world. This is the deli that outsiders generally don't see or
:03:53. > :03:57.smell. It is easy to believe that one third of Indians asked all
:03:58. > :04:03.living in poverty. Half don't have access to a proper toilet. India's
:04:04. > :04:09.economic inequalities are growing. People have a question, what have
:04:10. > :04:15.the country 's leaders done with India's new wealth? Tell me, what is
:04:16. > :04:35.life like for you living here? Did you think that the government
:04:36. > :04:53.looks after you? Do they care about you?
:04:54. > :05:04.She has invited me into her home. Let's see what conditions are really
:05:05. > :05:08.like inside this long. -- slum. They have attempted to make it as much of
:05:09. > :05:15.a home as they can. They've got clothing and bedding stored in what
:05:16. > :05:18.is the bedroom area over there. If you come here you can see something
:05:19. > :05:25.quite extraordinary. They have set up a little kitchen area. Despite
:05:26. > :05:30.them having very little, they have made a wooden floor and vote in
:05:31. > :05:36.makeshift fan in there. They have tried to make it as much of it
:05:37. > :05:42.decent home as they can. There is no running water, electricity is
:05:43. > :05:53.intermittent, every time it rains it comes through the roof. You have
:05:54. > :06:13.lived here for 20 years. Describe what life is like.
:06:14. > :06:20.Does it make you angry when you see there are now some very rich people
:06:21. > :06:44.in Delhi who are doing really well, and yet you are still stuck here?
:06:45. > :06:52.India's rulers face tough questions from India's voters during this
:06:53. > :06:59.election season. I've come to the Finance Ministry, workplace of my
:07:00. > :07:04.guest, Palaniappan Chidambaram, one of the longest serving and most
:07:05. > :07:09.influential members of the Congress party. India has seen a decade of
:07:10. > :07:16.economic growth. Yes, there is new wealth in this country. As India
:07:17. > :07:45.squandered an opportunity to fundamentally transform its economy?
:07:46. > :07:52.Palaniappan Chidambaram, welcome to HARDtalk. I want to quote some words
:07:53. > :07:58.from last year in the Financial Times newspaper. India, they wrote,
:07:59. > :08:04.has missed the kind of economic opportunity that comes along once in
:08:05. > :08:11.an age. You acknowledge that missed opportunity? I don't agree with that
:08:12. > :08:18.entirely. Some opportunities that may be missed, but some were denied
:08:19. > :08:29.to us thanks to the global financial crisis. And the Eurozone crisis. If
:08:30. > :08:36.these crises had not happened, we would not have slowed down to 5%. It
:08:37. > :08:45.is not the fault of the global economy, is it, the government
:08:46. > :08:48.deficit rising dangerously. Inflation going up sometimes to
:08:49. > :08:55.10%. Many people suffering as a result. You can't blame all of that
:08:56. > :09:02.on the global economy? The deficit reached the limit and inflation rise
:09:03. > :09:15.because of the stimulus packages. Three in succession in December
:09:16. > :09:19.2008. January and March also. They were a response to the financial
:09:20. > :09:25.crisis of 2008. We acted according to the textbook. In hindsight, we
:09:26. > :09:32.know that it had unintended consequences. The Indian people
:09:33. > :09:40.don't buy it. The leader of the opinion polls of who is leading, he
:09:41. > :09:50.calls the economic performance under your management, a debacle. What he
:09:51. > :09:56.knows about economics can be printed on the back of a post at stamp. He
:09:57. > :10:03.has said nothing about the deficit. Nothing about monetary policy. He is
:10:04. > :10:10.in a learning process, and I am sure he'll learn very quickly. He might
:10:11. > :10:15.regard that as patronising since the state he has run for a decade has
:10:16. > :10:21.gone much better than the national Indian economy. Only in the last few
:10:22. > :10:27.years. That's his record that he is running on. When India's economy was
:10:28. > :10:38.booming and we have the golden period, his state was no better than
:10:39. > :10:43.any other state. The leader of the BJP might quote back to you words
:10:44. > :10:51.that you came out with end 2007 when he said growth at 9% means nothing
:10:52. > :10:54.to a village who has no access to clean drinking water, no sanitation,
:10:55. > :11:02.no school within ten kilometres of his village. You pledged to change
:11:03. > :11:13.that reality. We have two a large measure. More people have roads than
:11:14. > :11:17.before. More people have access to drinking water than before. More
:11:18. > :11:26.children are in schools than before. There is no magic wand that can be
:11:27. > :11:31.done in two years. You have had a decade of growth, which you crow
:11:32. > :11:41.about in public. Crow is not the word. You are very proud of this.
:11:42. > :11:45.Shouldn't we be? Why haven't you leveraged that growth into a
:11:46. > :11:48.different reality for most Indians? You see the figures are good. I give
:11:49. > :11:56.you some different figures. One third of Indians are living on or
:11:57. > :12:03.below the poverty line. 40%... I want to stop you. One third are
:12:04. > :12:10.below the poverty line. But in a five-year period, poverty has been
:12:11. > :12:20.reduced by nine percentage points. The highest rate of reduction. It's
:12:21. > :12:24.all comparison. We can go through energy and transport and compare
:12:25. > :12:31.India with China. The inevitable comparison. On every single
:12:32. > :12:36.indicator of infrastructure development and speed and delivery,
:12:37. > :12:45.India is not just behind, but is so far behind that China is almost out
:12:46. > :12:48.of sight. I disagree. Would you rather live in China under the
:12:49. > :12:54.system, or under India in a democratic system? If I wanted
:12:55. > :13:00.electricity or a road to get my child to school, if I wanted
:13:01. > :13:08.healthcare, I would probably say a Chinese village. Unfortunately, I
:13:09. > :13:12.don't think the people of India want to be ruled by a 1-party government
:13:13. > :13:16.where they have no choice about their elected representatives and
:13:17. > :13:21.don't have free speech, free expression, freedom. That is the
:13:22. > :13:28.reality of India and Indian politics. Just to drill down to
:13:29. > :13:33.specifics on failures, and I want your opinion. On electricity for
:13:34. > :13:42.example, there was a promise delivered in fabric of 2005 to
:13:43. > :13:45.electrified the whole of the country so that every household would have
:13:46. > :13:50.electricity. There would not be shortages and blackouts. 2012, we
:13:51. > :13:57.saw the infamous blackouts in this country. Still, we see that many
:13:58. > :14:03.Indians in villages across this country do not have electricity. A
:14:04. > :14:10.fundamentally flawed promise. That's true. It only a way of looking at
:14:11. > :14:18.it. When we came office ten years ago, we had 110,000 megawatts
:14:19. > :14:22.installed capacity. Today we have 211,000 megawatts installed
:14:23. > :14:34.capacity. Far short of what you need.
:14:35. > :14:40.This is a failure. Let us be honest about it. It is not failure. Would
:14:41. > :14:45.you want me to give an answer rather than give in to failure? With all
:14:46. > :14:51.short of our targets. There are environmental concerns. NGOs
:14:52. > :14:58.protested against the terminal power plants, nuclear power plants and
:14:59. > :15:03.hydro plants. People approached courts to stop projects. That is a
:15:04. > :15:11.huge price we are playing for a system that we want and how. What
:15:12. > :15:17.about priorities? In recent years, you spend so much of your time and
:15:18. > :15:23.nation's money on subsidies and propping up the welfare system.
:15:24. > :15:26.Rather than delivering the capital investment programme, the
:15:27. > :15:36.infrastructure improvement we have discussed so far. We are a democracy
:15:37. > :15:43.and the government has to respond to what the people want. Are you
:15:44. > :15:50.suggesting the food subsidy is bad? The fertiliser subsidy is bad? There
:15:51. > :15:53.is a huge demand from the people. There is something called
:15:54. > :16:01.leadership. What leadership a few provided when you increase the
:16:02. > :16:05.proportion of GDP to spend on subsidies? What kind of leadership
:16:06. > :16:09.is that? Leadership is not to run over his aspirations or wishes or
:16:10. > :16:14.desires of the people. Leadership in a democracy is different from
:16:15. > :16:24.leadership in Avon democracy. India has done well in the macro greater
:16:25. > :16:30.times. Or how has that changed India to make it a sustainable
:16:31. > :16:34.21st-century economy? Most programmes are delivered on the
:16:35. > :16:41.ground by state governments. To realise that the human indicators
:16:42. > :16:48.are as good as any Western country. That is true. Do you realise that
:16:49. > :16:54.the birthrate has fallen in a number of states to good levels? These are
:16:55. > :16:59.things that education, health infrastructure, roads, schools,
:17:00. > :17:06.these achievements cannot be wished away. If you look at other places,
:17:07. > :17:13.there are far behind the national average. India is not one size fits
:17:14. > :17:18.all. I got the message loud and clear. (CROSSTALK). One factor
:17:19. > :17:25.denies all of India. That is corruption. Profound, endemic
:17:26. > :17:29.corruption. To what extent do you think the corruption we have seen in
:17:30. > :17:36.India, going back many years, have gotten worse under your
:17:37. > :17:46.government's administration? I agree there is corruption. Is it worse? I
:17:47. > :17:55.would not think so. (CROSSTALK). 92% believe corruption has gotten worse.
:17:56. > :18:01.60% bought corruption in one country got worse. I do not think we should
:18:02. > :18:07.go the polls. I am talking about 90%. Just because other countries
:18:08. > :18:13.have problems, does not mean you can rest easy. Corruption has not become
:18:14. > :18:21.worse. Corruption has been magnified. We are looking at policy
:18:22. > :18:27.positions on which they can be debate as instances of corruption.
:18:28. > :18:32.And since these have been magnified by some constitutional authorities,
:18:33. > :18:39.there is a widespread perception that corruption has become worse.
:18:40. > :18:44.They do not need magnifying. According to reputable sources, up
:18:45. > :18:47.to 30% of lawmakers either are facing or have faced criminal
:18:48. > :18:55.charges. Many of them are very serious. Is no different. It is
:18:56. > :18:59.true, it is no from what we read in the economist or Time magazine or in
:19:00. > :19:07.the Wall Street Journal about lawmakers in other countries. I
:19:08. > :19:14.think it is. 40% of your lawmakers suspected or charged of criminality.
:19:15. > :19:17.We have cases involving heads of governments and stays in other
:19:18. > :19:23.countries. Do you want me to give you at least? These comparisons are
:19:24. > :19:28.not relevant. I considered there is corruption in India. It is a problem
:19:29. > :19:34.that has to be dealt with. In a speech not too long ago, corruption
:19:35. > :19:40.was akin to the McCarthy witch-hunt in 1950s America. He said all kinds
:19:41. > :19:45.of allegations are made but we are determined to rise above the noise.
:19:46. > :19:53.All kinds of allegations are indeed made. (CROSSTALK). But the
:19:54. > :20:01.allegations tend to be true. How many are known to be true? Where do
:20:02. > :20:05.you want me to begin? Not me that Indians will tell you that so many
:20:06. > :20:10.of these allegations are true that people do not have faith in the
:20:11. > :20:19.public sector. Indians are 1.3 billion. 1.3 billion Indians do not
:20:20. > :20:23.speak to anyone with one voice. With the public are given a chance to
:20:24. > :20:28.vote, they tend to express deep disaffection with the status quo.
:20:29. > :20:36.I'm thinking of the city, Delhi. There is a state assembly election.
:20:37. > :20:41.Your party... The new ATP party is committed to cutting out government
:20:42. > :20:46.and ending the corrupt practices, and they scored a famous victory.
:20:47. > :20:54.You and your party might be sleepwalking into the -- in defeat.
:20:55. > :21:00.(CROSSTALK). We might lose or win an election. That is not the issue
:21:01. > :21:04.today. The Leader of the Opposition makes great play up on his humble
:21:05. > :21:12.roots. He points out he was a key server. His family was very poor. He
:21:13. > :21:20.said the Congress believe it is below their dignity to put the poor
:21:21. > :21:25.person in a backward class. They feel it is insulting to fight
:21:26. > :21:33.against those made for their work. Is that the election we face today?
:21:34. > :21:40.The Congress party in its history, over 128 years, based of a long line
:21:41. > :21:49.of leaders who have humble beginnings. -- boasts. Why does it
:21:50. > :21:53.look like your party has lost touch? We have been in office for ten
:21:54. > :21:59.years. There has been mistakes, successes, setbacks. People will do
:22:00. > :22:03.it and decide whether they want to re-elect us or not. India is
:22:04. > :22:09.changing. And the generation is rung up for him the name Gundy does not
:22:10. > :22:13.mean as much as it used to. One leading historian said, the Chris
:22:14. > :22:22.Maher of the Gandhi family is basically gone. -- charisma. A
:22:23. > :22:26.younger group of voters do not remember the sacrifices, real or
:22:27. > :22:42.imagined, of the antifamily. It that true? -- Gandhi family. To you think
:22:43. > :22:51.travel Dundee will be the person who finds family name no longer works?
:22:52. > :22:56.He is young. He is named the leader of the election campaign. He might
:22:57. > :23:02.lead us to victory in 2014. Even if he doesn't, can you assert that he
:23:03. > :23:10.will not lead us to victory in the next election? What India needs
:23:11. > :23:14.leaders of the complete the capital in India and the most powerful
:23:15. > :23:24.emerging economic nation, China. We have to find that set of leaders.
:23:25. > :23:31.We have to fashion a set of policies that will close the gap, given the
:23:32. > :23:37.difference in the two systems and therefore the difficulties of
:23:38. > :23:45.decision-making compared to China. I have been saying this again and
:23:46. > :23:50.again. You suggest -- your suggest -- your records suggest that were
:23:51. > :23:55.not happen. That is not true. I was Finance Minister when we recorded
:23:56. > :24:03.by% plus growth. If we grew at 1% for the remaining year thereafter,
:24:04. > :24:14.we were close the gap with China. The and you didn't. We didn't and I
:24:15. > :24:16.have told you why. Would you have the same conversation with the
:24:17. > :24:22.Finance Minister of China? I would leave it there. Palaniappan
:24:23. > :24:33.Chidambaram, thank you for being on HARDtalk.
:24:34. > :24:41.It is another changeable day on the way, unpredictable. Further showers
:24:42. > :24:47.on the way. In between the showers, some dry weather around. If you are
:24:48. > :24:49.popping out for a lengthy period of time during