‘Are we prepared to lose 30 per cent of GDP to save 3 per cent because of a financial shock?’

Percy Mistry: While people refer to the report as the Percy Mistry report, I refer to it as the MIFC (Mumbai International Financial Centre) report. Most of the credit for the report should go to Ajay Shah and K.P. Krishna, the stalwarts responsible, more than I, for its eventual production. Much has been said about the chairman not signing the report—but it wasn’t to dissociate myself with the report. After the report had been written, I have been a great advocate of it, pushing what it has to say and defending what it has to say. The personalisation, however, makes me uncomfortable. Still, I think the report, along with Raghuram Rajan’s report (on financial sector reform), actually does provide a good framework for where India can now go with financial sector reforms. I don’t think there is anything left out of these two reports where anyone should ask: ‘Well, what do we do?’ What should be done is extremely clear from both these reports. The issue is one of consensus around getting it done.

•Subhomoy Bhattacharjee: Why did it take us so long to get down to the ideas in your report? Was it simply inertia?

I think inertia has something to do with it. I am often fond of saying and I am not liked for saying that over the last 60-odd years, we seem to have developed a sort of national strategy where our approach to everything is meddle and muddle but stay in the middle. It’s never a strategy with a very clear sense of goals and destinations or of a path which is laid out in a straightforward way. And this is always explained by “political compulsions”. What can be done in a straight forward way is not gonna be done in a straight forward way. In the private sector, things have changed dramatically in the last 15 years. I think those changes will occur in the public sector as time goes by. Is this a report which should have been done much earlier? I am not sure about that. When you look at the reasons why the report came about, it was because a lot of people at a particular point in Mumbai were pushing for something they thought was important but most of them viewed it as a real estate proposition. People think that 20 gleaming buildings make you an international financial centre. In a country like India, this proposition is absurd.

... contd.