So, we turned the question on its head. If Mumbai needs to be an international financial centre, what kind of financial system should it (and India) have in the first place? And, did we have the kind of financial system that would enable any city in India—Mumbai because it is India’s national financial centre—to become a credible international financial centre? That was our starting point.

That’s what led to the report unfolding the way it did. We thought we could create the kind of financial system that would make Mumbai a very vibrant and capable international financial centre and where India-related businesses was concerned, the kind of financial centre that could take a lot of business away from Singapore, London and at the same time generate a whole load of business that has not yet emerged. So, I just don’t think the timing would have been right a long time ago.

•Dhiraj Nayyar: Do you agree with the view that real sector reforms should precede financial sector reforms?

I don’t buy into this real sector versus financial sector dichotomy the way most traditional economists do. In the US, we call it the sort of Main Street versus the Wall Street syndrome. I think the two are inextricably wedded and what happens in the real sector at any point of time reflects how efficient, inefficient, good or bad your financial system is and that it is really impossible to separate the two. The additional thought we have put into the report is where international finance is concerned you are actually talking about real sector activity in terms of provision, like the IT sector, where the provision of goods over services actually enhances the value added in the economy through a whole new range of activities which traditionally you would call real sector.

... contd.