India's Q2 GDP will surprise you | Growwing India Podcast ft. CEA Dr V Anantha Nageswaran

2015 the government started the

sovereign gold bond scheme. Why has the

ministry of finance not hedged this

gold?

>> The system as a whole benefits when gold

prices go up. That in turn has resulted

in lower cost of borrowing for the

government of India which is true.

Government of India's 10ear borrowing

cost has come down from 9 12% 10 years

ago down to 6 12%. For many decade like

almost 15 years I have been uh working

with SEBI part of their committees. I've

seen the interpretation of the

disclaimer being written in a point size

which is so small that you need a

magnifying glass.

>> Consequences of financial wrongdoing can

permeate other sectors of the economy

much faster than what happens in

specific non-financial sector.

>> Is there an acceptance within the

government that corruption at this level

is endemic?

>> Some of these things will always be

there at some level. I don't think there

is any society you can point to and say

maybe a handful have completely

eliminated corruption whether it is uh

day-to-day transactions or big ticket

transactions. Many of us in the public

space when we comment on these things we

always look at where we want to be and

where we are and we sort of feel oh we

have a long way to go but it's equally

important to recognize where we were and

where we are and that progress also has

to be acknowledged and that is an

important motivator even for those who

want to do good in their public roles.

large crimes go unpunished, but my

80-year-old father has to go to the bank

branch for his KYC again and again, you

know, and now with this whole know your

vehicle, the memes are like out of the

park. So, h how do we balance this?

Welcome to the Growing India podcast. I

am Monica Halan. I talk to thought

leaders in economics, policy,

geopolitics geoeconomics

so that we can deconstruct this

increasingly complicated world. The

growing India podcast is a joint

initiative between grow and me to talk

about India's most pressing issues. I'm

delighted to welcome India's chief

economic adviser Dr. V. Ananteshwaran

to talk about all things finance, policy

and economics. So belt up. Thank you so

much for being here, making the time and

talking to us.

>> You're welcome.

>> I've actually listened to some of your

uh recent talks and there's one thread

which is coming up again and again and

you're saying that I we the government

has to reduce the cost of being honest.

It needs to improve the ease of being

honest. I have personally believed that

some of us pay what I call the honesty

tax.

>> Right? So there is a small uh sliver of

population who pays income tax.

There are others who could pay but since

they have uh bribed the government

officials at a lower level they feel

justified in not disclosing their income

because they say we've paid the tax

already to the government whether it's

in a bribe

you know why would I pay it again and

that's it's a it's an argument which

comes again and again.

So as an income tax payer you feel that

you have disproportionately paid and

then you're also paying higher prices

for the goods who which are now

including the price of the bribe right

so the manufacturer or the they are

including the price of the bribe in the

cost of the product and you're consuming

products which may be substandard

because compliances are not really

careful because you've be uh there's

been a bribe paid

what do you mean I mean do you is there

an is there an acceptance within the

government that corruption at this level

is endemic.

>> What did you mean by saying reduce the

cost of being honest? What are we doing

about it?

>> No, first of all, uh the tax dimension

is only one aspect and even there I

think uh Mr. Dr. Sujit Bala has been

writing correctly. So that India's tax

to GDP ratio adjusted for its uh per

capita income is already quite high. But

I was not coming at it from the tax

angle or the you know the bribes etc.

They see one thing you have to be very

clear is there are uh problems which we

have inherited as stock of problems and

when we say government we should

remember we have government at all

levels union state and local etc.

uh where I was coming from is in terms

of the regulatory burden because when

you have so much of compliances,

inspection and licensing etc. The easier

tendency is to take shortcuts and the

moment you take shortcuts then you are

of course forever hostage to the

discretion of the officials concerned

and that is so that is what I meant by

saying we have raised the cost of being

honest which means raised the cost of

compli being compliant

it also has uh it naturally rubs off

into

peer-to-peer transactions in private

sector transactions also

uh then honesty becomes a commodity at a

premium and but it is honesty that leads

to trust and then to scalability. So I

was coming from this angle because as a

country with 1.45 four five billion

people. You need scale uh in everything

we do and this compliance burden

actually therefore indirectly or

directly or both inhibits formation of

economies of scale and that was the

angle I was coming at.

>> Okay. But the root cause does remain uh

the rent seeking because of the

compliance burden because of the

inspector raj there's an interpretation

of the rule right for example the rule

could say you should have a medical test

of your employees now unless you define

that medical test

what is to say that an MRI is needed or

a blood group uh check is needed who so

the inspector can ask for anything you

can produce one paper he will ask for

something else because what he actually

wants is money.

>> No, absolutely.

>> So just just pulling on that thread um

as a policy maker and I understand the

difference between the center what the

center can manage what the states can

manage. I understand that the cent's

remmit is only so much and then

operationally it's really at the state

and district level that uh things will

happen. But this is as a policy maker

when there is a problem which is so

endemic I mean we we actually see rate

cards for various things where uh a

thousand rupees you you're given the

break up of till where it goes at the

state level when corruption is so

endemic what is a policy intervention I

mean we have a culture of corruption how

would you as a policy maker solve it

>> so Monica I think I have to address this

at multiple levels yes obviously when I

speak of the cost of being honest

necessarily. Therefore, people take

shortcuts and I told you at the in my

earlier response as well that it does

lead to uh certain discretion being

exercised by the officials at the lower

levels and you are forever dependent on

their discretion to let you continue or

not continue and rentseeking behavior.

All this is all part of the regulatory

framework which we have created over the

years. And therefore the answer is in

many cases uh is to let go of some of

these regulations which is what I wrote

in the economic survey as you know

letting go uh in uh in January this

year. Uh and that will naturally address

rent seeking and by the way in many

areas we have done that our successive

governments have done that. uh some of

the things that we used to bribe our way

through are no longer necessary. They

come automatically. So we also have to

take cognizance of the progress except

that the areas that need to be addressed

still remain formidably large. It is not

as if we have not understood the linkage

between uh licensing, inspection,

compliance and rent seeking behavior or

rent giving behavior on the part of uh

the public also. It cuts both ways. So

the the answer is that is why the

government is very clearly focusing on

you know the important even in tax

administration the focus on faceless

assessment or giving the taxpayers the

ability to go back up to four financial

years and redo their numbers if

necessary in a bonafide manner or

currently they focus on multiple levels

of deregulation a task force looking at

states and uh a high level committee

looking at union ministries

and uh two informal groups of ministers

looking at various central ministries

and rules and regulations. So there is a

recognition that whatever we have been

doing in terms of deregulation reliance

on self-certification and management by

exception are all slowly whittling away

the areas and domain where rent seeking

is either prevalent or inevitable or

necessary or all three and and it is

necessary for us to urgently expand

those areas where rent seeking

can be brought down to a minimum. or

even eliminated fully. That is what will

give us the uh ability to take on the

strategic challenges we face because

ultimately the objective is to let

economic activity proceed uh not at the

discretion of the bureaucracy or the

government machinery but mostly on its

own. And today we have the technology to

be able to target the evaders and the

wrongdoers rather than making these

rules and regulations and processes

omnipresent and omnibus. And that is the

direction in which we should go. Deploy

technology reduce the compliance burden

on most people. Use technology to

isolate and target those who are not

obeying the laws and also make them

reasonable first before we use

technology to go after the serial

evaders or whatever. This is broadly the

framework with which government has to

proceed. This kind of realization I see

it very clearly at the senior levels of

bureaucracy and the political executive.

But always as we come down to different

levels naturally there is a dilution of

intent and execution and we have to keep

plugging away as we have been doing. So

many of us in the public space when we

comment on these things we always look

at where we want to be and where we are

and we sort of feel oh we have a long

way to go but it's equally important to

recognize where we were and where we are

and that progress also has to be

acknowledged and that is an important

motivator even for those who want to go

do good in their public roles. Two

questions from this one is that you said

that it is important for economic

growth development business

>> right?

>> There is an economist view and this is

these are respected economists who say

that this is Greece which oils the way

and we should look through it. I find it

personally offensive that um this view

is actually fairly accepted in India

because the response is at least then we

move ahead rather than the projects

getting stalled.

What would be your

>> that is more of a satisfying or what in

in you know in the behavioral science

literature they call it satisficing that

is you are willing to agree and accept a

second best word. I'm not saying that

that is a philosophical answer question

to answer but it doesn't it should not

stop us from aiming for the first best

world which is to because in any

government system whether it is

developed or developing some of these

things will always be there at some

level I don't think there is any society

you can point to and say maybe a handful

have completely eliminated corruption

whether it is day-to-day transactions or

big ticket transactions. So given that

it is a part of human life for for

thousands of years or whatever it is

important at the same time that we

should make it possible for most

ordinary citizens to go about their

lives or businesses without having to

think about it.

>> I think that should be the primary goal.

whatever residue remains will be there

and you can that's why I say that today

you can use technology to address the

residue but I don't think we should

accept it as given and say we can't do

anything about it because

technology does enable us to address

this issue and we have been addressing

them so we should keep at it that the

end goal should not be to live in a

second best world

>> you're saying that technology is to be

used to sort of weed out the bad apples

or the instance es of u rent seeking

graft change the behavior using

technology there's a situation right now

where uh all the citiz the vehicle

owning citizens are now being told to do

a KYV know your vehicle so if you have a

fast tag you have to now do a process to

upload pictures of your car this is

being done so that a few people who are

misusing the tags don't do it so I know

it's a very specific question and I

obviously don't expect you to sort of go

into the details of it but you know from

a citizen point of view there is a

feeling that there is a huge

bureaucratic overreach in using

technology to make my life very

difficult when I have to do KYC every

other year and I'm look I'm giving you

I'm filtering out the views and telling

you what people are thinking about

they're saying large crimes go

unpunished But my 80-year-old father has

to go to the bank branch for his KYC

again and again, you know, and now with

this whole know your vehicle, the memes

are like out of the park. So h how do we

balance this? No,

>> it's a fair question, Monica. I

personally do not I don't have a vehicle

and personally I'm not familiar with the

details of this particular requirement

although I have also come across some

people forwarding some messages to me

only this morning and I I didn't know

about it and I I therefore I don't want

to comment on the specific example that

you brought up that's not fair but I

hear you that in general the the mindset

this exactly is what I mean by saying

letting go the mindset is still to sort

of if you have a problem with a few then

you impose an omnibus requirement on

everybody and uh this has to change that

because this is what I call the type one

and type two problem in policym

do you want to allow a vast majority to

continue their activity unhindered and

accept the possibility that some five to

seven or 10% will continue to evade and

uh and take shortcuts or do you want to

ensure that I will not let anybody take

a shortcut or anybody evade or disobey

and in the process if I'm going to

inconvenience majority from going on

with their lives. This is a this is a

trade-off. This is exactly in quality

control. We know that when we have

learned our statistics uh what kind how

do you set up your quality control

process in such a way do you want to

eliminate the risk of not even a single

bad product leaving reaching the end

customer or do you want to make sure

that I control my cost and even if one

or two bad products reach the customer I

don't want to lose out on the investment

that I have made in the production

process there is a trade-off and this

tradeoff is most of the time the the

policy apparatus errors on the side of

saying I shall not let even one person

evade the rule and in the process

construct a very elaborate mechanism

which is what you point out annual KYC

or now it is a KYB process etc so that

is I think it's a mindset shift that

needs to happen we have to be at it but

the important point you brought up with

respect to KYC is that sometimes I

notice even among private sector

entities this is a cultural thing I

don't think this is a government thing

even in private sector financial

institutions even in a situation where I

have a relationship with one particular

arm of the bank I have provided all the

information

and I need to do let's say have open a

credit card or some other a locker

facility if I have a savings bank

account again they ask for the same

information all over so this is this

seems to be the cultural ethos and that

stems from what I have also argued

that we are a relatively a low trust

society that uh you know this goes back

to the uh excellent book that I read

during COVID times by Joseph Hrich the

weirdest people in the world and I have

referred to it on numerous occasions in

my speeches where the weird word weird

is an acronym and that stands for white

educated industrialized rich democratic.

So we our societies are mostly kinship

group and community based societies and

within those small groups we are

extremely trusting and uh through word

of mouth crores and rupees are exchanged

or lent and paid back etc. But just

outside those groups we become extremely

low trusting where even contracts are

not honored and that is why uh we have

so many renegotiations between

government and private sector between

private sector entities themselves etc.

That is because

these kinship

community based societies have evolved

that way and that permeates both private

and public sector behavior. So the root

cause of this is the low trust and I

feel somebody has to make a start and

the government is well placed to start

and that's why I'm saying if we lower

the cost of being honest or make it

easier to be honest that will then

slowly

permeate down to private sector

transactions also and then honesty

builds trust trust in turn builds scale.

So it is both it is a cultural phenomena

as much as it is a government regulatory

phenomena.

>> Right. Right. But you are you are in

you're within the machine. You're seeing

change. You're seeing a change in the

mindset.

>> Definitely.

>> Okay.

>> It is definitely happening. And that is

the reason why there is so much emphasis

on decriminalization, deregulation

and uh looking at it at all levels of

the government, union, state and local.

But given the scale of the country and

given the scale of aspirations, it is

also true and I again stress uh Monica

that it is human nature that that is why

many of the spiritual teachers stress

gratefulness so much not because humans

are by definition ungrateful. It is

human nature that once something that we

have been looking for is done and

fulfilled we move on to the next thing.

So whatever grievances we may have had

against the system over the years as as

and when one by one they addressed we

don't dwell on the fact that those have

been addressed and we feel the relief

and the difference we move on to the

next thing. So that's why I stress it's

equally important to acknowledge the

progress we have made whether it is in a

railway ticket reservation or getting

some licenses or uh in in many areas

things have been made automatic and for

example we don't think about how long it

takes to make a uh financial

a fund transfer etc and it is not even

there in several many other developed

countries also or the QR code based

payment so lot of things in our daily

lives which used to be a major chore or

payment of bills. Even government used

to make it paying bills to the

government a very difficult thing to do

earlier but now we know that it happens

through your bank account almost

seamlessly instantaneously but we don't

pause for a moment to you know give it a

thought how much of time we used to

spend standing in front of our

electricity uh bill counter to make our

monthly electricity payments etc. This

is fair. I'm not saying we should, but

I'm just saying that things are being

addressed. We have come this far and I

agree. We have a long distance to go as

well. That's the nature of the evolution

and development process.

>> That's the human being.

>> Exactly. We want more. Yeah. Yeah.

>> You're speaking of deregulation and now

I will speak from the other side of my

mouth and say that if I pull the

deregulation thread hard enough, I come

to issues of consumer protection. Sure.

>> For many decad like almost about 15

years I've been working with SEBI part

of their committees.

>> Sure.

>> So I've seen the operations of

especially the mutual fund industry from

the inside.

>> Mhm.

>> Right. So I've seen the interpretation

of the disclaimer being written in a

point size which is so small that you

need a magnifying glass and Mr. Bav

having to specify the point size 2009.

Okay. uh the speed of the disclaimer on

audio video had to be then prescribed.

So it's a policy question again

>> I agree

>> principlebased versus rule based

>> my

logically it has to be principle based

but when I see

>> in operation on the ground

>> and this is an argument I've had many

times with people around me where

because I'm inside that machine

>> I will justify the micromanaging of

>> the regulator

>> the regulator which is micromanaging

every small thing from ex everything

because you see evidence through numbers

that some of the people are actually

violating and if one does everybody else

does

>> no no you're absolutely right

>> how do you so so one question is policy

prescription for rules based principle

based is there an example of a

principalbased regulation which we've

seen working without prescribing point

size of your disclaimer

>> no I think It's uh it's an excellent

question and excellent uh issue to flag

here and as you correctly said you know

you are now speaking from the other

perspective which is fair. I think it is

a trial and error process. I think in

general we have to start with the

principalbased approach and where it

doesn't seem to work where a vast

proportion takes takes undue advantage

of it or wrong advant advantage of it

then we have to become prescriptive that

is one part. So it is a trial and error

process. There is no perfect answer. Nor

is it a situation where if you reach a

steady state, you stay there forever. It

doesn't happen. It is in the nature of

uh human behavior that over time we will

tend to become complacent and confident.

And as we become complacent and

overconfident, bad behavior creeps in.

Whether it is in lending or financial

market investing. One time it could be

derivative, another time it could be

private credit, another time it could so

there will always be something and these

issues are never ever settled and stay

there. And my answer is therefore it is

an evolutionary process. You have to

figure out what works and the trade-off

between not impeding legitimate activity

and commercial transaction and financial

transaction and ensuring good behavior

is uh is uh an iterative process.

However, I'll just make one small

distinction when it comes to finance. I

have not been so

um wedded to the idea of principalbased

regulation. I have been slightly leaning

in favor of rules or prescriptive

regulation for the simple reason that

consequences of financial wrongdoing can

permeate other sectors of the economy

much faster than what happens in

specific non-financial sector. In

non-financial sector, I'm more willing

to let competition do the role of the

reg job job of the regulator and where

the consequences of wrongdoing or wrong

behavior will be confined to the fate of

that sector or that company that

industry alone. Whereas in finance is

the other way around. Competition can

actually breed excessive risk

takingaking. So being for the simple

reason that competition doesn't work the

way textbooks tell us in finance that

does make the case for prescriptive

rather than principle relatively

speaking in the financial sector.

>> Right. Right. And I will come to this a

little later. I'm going to like expand

on exactly this just in a little while.

But I want to actually segue into gold.

>> Okay. where we are importing what um 7

to 800 tons of gold right now and Indian

households things like this we are

owning 25,000 tons of gold okay

um 2015 the government started the

sovereign gold bond scheme and I

remember asking somebody around your

office that time that are you hedging

they said no gold prices will not go up

so there was no hedging then you've

written a book on derivatives two books

Why has why has the Ministry of Finance

not hedged this purchase this gold?

>> It's a it's a good question and I don't

have a straightforward answer.

>> Maybe just in one two lines explain to

somebody who may not understand this

word hedging and what it means. So I

mean obviously uh

if

you have borrowed gold from someone

and

you promise to repay them in gold which

means at a future date naturally when

the price of gold rises the quantity of

gold that you are repaying is the same

the quantum of gold but the price that

you will be buying it so that you are

able to repay the gold loan that you

have taken the the the metal will always

be higher will obviously be higher and

therefore unless you have earned enough

return with the goal that you took in

the loan then effectively you are ending

up paying a much greater value and that

is why therefore

one has to hedge against a risk of price

moving higher if you are if you are in a

borrower's position and if you are in a

lender's position you have to hedge

against the risk of the price going

down. So this is exactly basically you

are protecting your risk against price

fluctuations.

Of course government's perspective is

that I think to the extent that there is

also gold accumulated by the central

bank and it is all part of the overall

government system. Although gold is not

gold revaluation is not taken into

consideration when the central bank

considers uh dividend payouts etc to the

government. It is not as if there is a

natural hedge out there. There is a

hedge in some sense because between the

Union government and the central bank

there is also a net long position in

gold which therefore the government of

the system as a whole benefits when gold

prices go up and

maybe the quantum of gold that has come

into the system is still not considered

big enough or for that matter because of

the gold uh uh monetization that has

happened through these schemes uh if we

had brought down the fiscal deficit or

the amount of borrowing we needed to do

in the marketplace that has been kept

under control and that in turn has

resulted in lower cost of borrowing for

the government of India which is true

government of India's 10ear borrowing

cost has come down from 9 and a half% 10

years ago down to 6 and a half% then to

some extent you have also gained retain

gain some benefits out of this that may

actually even exceed the uh the

additional cost that you are incurring

by having to pay them back uh at higher

value at the present value of the gold

which is on the higher side. all that

these are all conceptual explanations.

uh but I since I was since I'm not privy

to this uh decision-m framework I don't

have an answer to your question uh why

we are not hedging or or are we thinking

of hedging in a much broader term as I

explained to you just now I I don't have

the answer to that so why discontinue a

scheme which was really popular with

people who were actually buying the

government bond instead of I mean look

this is a problem on our balance sheet

the idea when the gold bond sovereign

gold bonds scheme came was to reduce the

pressure on the balance sheet because we

import so much gold. If people were to

buy the bonds instead then we wouldn't

have to import that much. So

>> that's one part that is one part. The

real purpose was also to monetize the

gold that is sort of locked or frozen in

people's walls or people's uh homes etc.

that you know you don't have to buy that

much of gold

>> and also the gold that you have is now

coming into the formal financial system.

Instead of buying gold, you are now

buying the gold bond.

>> Correct.

Why discontin it? So that's why I said I

don't have I don't have the answer to

your question. Let me I I need to I need

to be well informed before I answer the

question.

>> Okay. Okay.

>> Then and this is something which has

>> I've asked this a lot to a lot of

people. I've thought about it for 10

years which is that why is the import of

gold on the current account and not

capital account. It is an asset. You are

taxing it like an asset. For when I

declare my net worth to the government,

I'm supposed to disclose gold holdings.

People do or may not do. Reserve Bank of

India uses gold as its asset.

>> I think it has to do with the way

international bodies or multilateral

institutions have defined the system of

national accounts. Whether it is taken

as a consumption expenditure, if it is

in jewelry form or if it is taken as an

investment in that case should it go

into the gross fixed capital formation

etc. I think those are all probably also

related to some of these accounting

standards and national income accounting

guidelines etc which is which is

followed internationally. it may have a

lot to do with that and one needs to

look into that and it cannot be

unfortunately a unilateral uh decision

by one country. Uh so that is where I

think probably the answer lies to your

question.

>> Yes, I that I understand that this is

part of the uh way global accounts are

written

>> right

>> the these are written many many decades

ago.

>> That's right.

>> We are number four going to number three

in terms of GDP. The position of India

on the global stage is very different

today.

Is there any thought that maybe we

should tinker with this because our

balance sheet suddenly will look very

different. Our

>> we need to understand the logic behind

why it was classified as a consumption

expenditure and why it can't be uh uh an

invest and treated as an investment

expenditure like we do in terms of real

estate. I mean we form residential asset

formation and it comes in the investment

uh c residential capital formation

category. It doesn't come under

residential uh consumption spending

category. I agree with your the

conceptual merit in your question but we

need to think about it but I think I

don't think it is particularly uh an

issue for India at this moment or for

that matter in the coming years because

our current account deficit is quite

well behaved and well under control even

with the current trade export

restrictions etc or tariffs etc our

current account deficit will not be more

than 1.2 2 to 1.3% of GDP, not even 2%

we used to worry about getting to four

and 5% of GDP etc. So it's not a macro

stability issue at this point at all.

Therefore we need to look at the

conceptual logic as to why it was

classified this way. Not so much because

it it is a it is an imperative for us at

the moment. It is not a macroeconomic

imperative. It's more of a conceptual

imperative.

>> Correct. And also maybe when it is not

an imperative it's good to sort of sort

this before

>> absolutely

>> things change.

>> I think we we do need to understand this

and I I think I I would rather first uh

figure out the logic of the current

arrangement uh before I can sort of say

why it isn't the other way. Uh yeah

>> right.

Is there a way to digitize to use a

stable coin on gold which monetizes the

physical asset and this then also

extends to real estate because

tokenization the way that we've

understood it has been a speculative

um digital entity with no underlying

with stablecoin there's an underlying

asset now at least after the genius act

we have a dollar or a treasury

um US or a dollar which sort of backs

the stable coin. So you can have a

stable coin if there is an asset.

So is there are we anywhere near

thinking about it's the the pipelines

are not there. I understand that we have

not even accepted the fact that it's an

asset other than for taxation purposes.

There are no regulations around it. I

think the definition of an asset is not

whether it is backed by uh uh currency

or a treasury or a short-term treasury

paper etc. An asset has to have a

certain cash flow behind it. And a

crypto, a stable coin is nothing but a

crypto asset. A cryptocreation rather.

It is not even currency. It's a crypto

except that the issuer says he or she

has equalent amount of currency behind

it. At the end of the day, it is just a

line of bunch of code. So a fiat

currency itself operates on the basis of

the trust of the issuer which is the

sovereign and a crypto is even one more

step purely a trustbased instrument but

it doesn't even have the backing of the

executive the sovereign except that the

issuer who's a private entity claims

that they have equivalent amount of safe

and riskless asset behind it that

doesn't necessarily make it an asset but

tokenization is a different and stable

coin is a different thing. I will

probably continue to make the

distinction between the two whether we

should be whether we could and we should

tokenize real estate, gold holdings etc.

I think there is a merit in what you are

saying but that is not to say that that

puts stable coins on the same footing as

tokenizing uh immovable or semovable

assets. Both are two different

propositions.

>> Okay. Can you just little bit expand on

that? Like they're different because

>> because there is see a real estate has a

cash flow and gold by sheer tradition

history gold and silver are accepted as

uh uh something that has value intrinsic

value in and of itself and banks have

been lending against it for collateral

basis. It is not and and silver has also

real life applications in uh in mobile

phones and cars and so on and so forth

etc. So these are much more different

from uh a stable coin which is just a

backed crypto uh instead of unbacked

crypto. uh therefore tokenizing this so

that you know title transfers and

facilitating movement of ownership etc

and also giving it a huge security of

title and which cannot be easily uh you

know uh count what should I say usurped

all those things are the advantages of

tokenizing these real assets but a

stable coin is a privately issued uh uh

I don't even know know what to call it a

privately issued instrument

let's put it that way neutally

except on the basis of the claim made by

the issuer that they have a certain

backing to it but it has got no

intrinsic merit in and of itself. So

that is so I think one can be in favor

of tokenization without necessarily

having to extend that logic to saying I

am in favor of stable coins as well.

Both are two different uh things.

>> Okay.

Is there any thought within the bricks

or any other country grouping non uh

North Atlantic grouping to use some

variant of tokenization as a payment

mechanism?

>> No, in India we have our own payment

mechanism.

>> No, that's internally. No,

>> India, Russia, India, China, India.

>> I don't I'm I'm not privy to any such uh

conversation at my level for sure. Uh I

don't know. But I think tokenization or

or rather for that matter payment

crossber payment systems. This is where

support stable coins are supposed to be

helping. One alternative is uh CBDC and

RBI is pushing uh CBDC because that also

has all the merits of a a so-called

privately issued stable coin and yet the

central bankers don't control over

monetary policy or monetary sovereignty

etc. So that is also something that is

an equivalent and more legitimate

alternative with doesn't dilute the uh

powers of the central banks and monetary

transmission mechanisms in individual

countries.

>> Right. Right. Right.

>> That's why RBA has been uh has been

batting for CBDC as a means to ensure

crossber payment mechanism.

>> Yes. And also it's interesting because

uh recently the FM actually spoke the

finance minister she said that no nation

can insulate itself from systemic

systematic systemic change whether we

welcome these shifts or not we must

prepare to engage with them

>> right

>> and then soon after RBI governor said

that uh the government should promote

the use of CBDCs which is the central

bank digital currencies

>> rather than stable coins. just explain

the tension like what is what are the

two things

>> I think there is no tension between the

two conceptually she's right and and

practically he's right

>> uh no tension not between like FM and

RBI the tension between a CBDC and a

stable coin where uh

>> a stable coin so so a stable coin

>> based on gold becomes something that I

can use to trade say with China or

Russia but a CBDC which is bases the

rupee E

>> question is stable coin is who is the

issuer? the RBI. Let's say RBI.

>> No, then it's not a stable coin. It's a

CBDC.

>> It's a CBDC.

>> Yeah, it's a CBDC. That's what I'm

saying.

>> Then it's a central bank. It's a

sovereign has control. I mean, it's

important not to lose control over the

monetary transmission because ultimately

the experience of privately issued

money. I think Barry Aish Green wrote

about it in New York Times etc. about

few months ago. So the whole problem

arises when there is a proliferation of

stable coins because it is considered

stable because it is backed by some uh

risk-free assets is that it can lead to

erosion of monetary transmission. It can

lead to central bank don't know what the

money supply is and whether you can

influence the inflation rate and then

the trust factor becomes even more

important than in the case of a

sovereign issued currency whether it is

digital or uh paper because the moment

for example one of the issuers and I

don't want to get into naming here uh if

in their website they used to say every

single dollar of uh crypto they issued

was backed up backed by shortdated

treasury bills etc. few months later

they said shortdated treasury bills and

highly rated corporate securities as

well. Now the moment you do that because

you are not uh issuing interestbearing

uh this thing and you need to make some

money then therefore the stable coins

you issued the dollars you collect you

invest somewhere and you earn your uh

return that's the what the issuer makes

money if the the moment they take it to

nons sovereign securities as a backing

that has a default risk etc. And

therefore the holder of those stable

coins the moment they start losing trust

that their stable coins at all points in

time can be exchanged one to one for the

fiat currency then the system can easily

have a run. The moment that confidence

erodess and then if if if there is a

demand for currency in from one stable

coin issuer then it can spread to it can

infect other stable coin issuers etc.

And these kinds of risks will

necessarily will arise and they have a

very good chance of arising. That is why

I'm saying we need to make a very clear

distinction uh between uh stable coins

and CBDC's or tokenization.

>> Okay. and uh a world where RBI issues a

CBDC

basis gold is not something that

>> whether it is if a if a sovereign issues

it it doesn't necessarily have to be

backed by something then you know then

effectively you are saying we are not

issuing today paper currency

>> with any metallic standard behind it is

being issued on the basis of the

authority of the sovereign that's why

it's a fiat currency a CBDC can be a

digital fiat currency right I mean

whether it has to be backed by your gold

or not is not is is is not a relevant

consideration at this point.

>> Yeah. U the reason I'm asking it is I am

unable to see the rupee ruble trade

unless we have a common uh means of

exchange which to be the dollar.

>> So I'm still I'm working around this

problem of saying I need to trade with

you. I have rupees, you have rubble, we

used to use dollar.

Can we now use gold? Because otherwise

how do you fix the value?

>> No, I suppose as I said since I'm not

pree to this conversation, it is better

off probably you should invite the RBI

deputy governor or governor for your

podcast and ask them this question.

>> Definitely. Definitely. I'm going to

move to derivatives. You have two books

on derivatives. One I have got for you

to sign.

>> Um so there are two views. There is the

Greenspan view of risk allocation and

there is the Buffett view of uh weapons

of mass destruction.

We are not a very financially literate

country. We have just got banked. Okay.

2014 Jandhan.

>> Yeah.

>> We've got millions of bank accounts

open. We are a first generation

banking population right now. Um would

you say that in India the role of

derivatives has been more in terms of

weapons of mass destruction rather than

risk allocator? And again you use this

uh analogy of a scalpel that in India

it's actually been used roughly because

we've seen the sort of uh uneducated

rush towards the derivative trade the

FNO trade on the Indian markets and then

sebi had to step in there was a lot of

concern on what was happening. So how do

you see the role of derivatives in the

country? First of all, uh Monica, I

would say financial literacy isn't big

in almost any country in the world

whether it is advanced or developing and

India isn't isn't unique in that respect

because I again go back to what Mr.

Harry Marowitz the man who invented the

mean variance optimization and won the

Nobel for it. He said I allocate my uh

savings 50/50 between stock and bonds.

He was not doing mean variance

optimization in determining his own

portfolio. So in that sense I think

financial literacy is something that is

good to talk about but more often than

not the fear of missing out I think as

Charles Kendallberger supposedly wrote

and I don't have the exact quote nothing

can be harmful to a man's peace of mind

than seeing his neighbor getting wealthy

something equivalent to that Charles

Kendelberger is supposed to have said so

I think when that takes over then I

think no matter how literate you are

otherwise on paper uh your sense

expenses will normally take leave and

you would tend to want to therefore

somehow catch up and that in turn leads

to potential grief in terms of

investment losses. So I think there it's

a matter of degree and even in the

developed world I think derivatives have

rarely been used for the purpose of

hedging and more often than not been

used for the purpose of uh speculation.

uh you could uh name the 2008 financial

crisis or any the securitization based

uh problems. Most of the uh problems

arose because the credit default swap

which is nothing but a credit default

derivatives issued again were orders of

magnitude higher than the underlying

security in terms of in terms of the

outstanding value. And that can happen

only if so many people are speculating

on the value of that security. Because

if you want to hedge your holding from

losing money, the amount of outstanding

derivative should exactly match the

outstanding value of the underlying

asset which wasn't the case. The

derivative outstanding was orders of

magnitude higher. So I think this

speculative role of derivatives has

always vastly exceeded its use as a

hedging instrument. And therefore the

problem in India was that yeah you are

right it is not so much the literacy

level it is the income level and

therefore the ability to withstand the

losses uh compared to a country with a

much higher per capita income etc. And

even with respect to the speculative

versus hedging role, the more the

shorter and shorter the maturity of the

instrument becomes, the more and more

speculative purpose that it is possible

to be applied for exponentially

increases. It in fact loses whatever

little even theoretical potential it has

to be a hedging instrument. The moment

you bring in same day maturity, half an

hour maturity or one week maturity etc.

it loses all potentiality for being a

hedging instrument. So then it doesn't

as in in the in the jargon of financial

uh literature, it doesn't complete the

market. It has got no relevance except

as a being a different form of a casino

>> right which is what happened in India.

>> It happened actually again it is not

something we are original in that

respect. It is also an import foreign

import. these uh same day derivatives,

same day uh issuances started

proliferating in Wall Street and many

other Anglo-Saxon markets and then we

immediately uh it it came over here as

well. So these things have their origins

elsewhere and we are quick to uh imitate

them.

>> Yeah. But uh to a large extent the door

has been shut forward. I think so to

again as as we discussed earlier with

respect to your question between

principles and you know uh uh

prescriptive regulations it's a cat and

mouse game. It always will be the case

that the regulator has to be on their

toes watching because the industry is

always quote unquote more innovative

than the regulator and they will find

some other instrument. And so the the

regulator is doing a wonderful job of

putting out a warning like a saturary

disclaimer on cigarette packs. nine out

of 10 trades lose money etc.

>> made no difference. No, no, I these are

all hygiene things. You have to keep

doing that. Uh as in when people

eventually uh get their moment to

realize they will realize it. But that

doesn't mean that one stops doing that.

It has got its own utility. So we should

keep doing that.

>> One place where you would imagine there

would be a huge role for derivatives is

agriculture. So I found stray cases of

wheat farmers using futures, cotton

farmies, farmers in Maharashtra using

put options but these are stray. They

are they are the exception.

We don't have crop insurance. You when

you think of the problem of agriculture,

we think of uh the debt related

suicides. You look at so much of

distress at the individual level and you

look at the financial markets and you

say but you know what there is a product

which solves this problem.

How do we even bridge this gap?

>> No, it is true. I think uh there I feel

you are absolutely right uh Monica.

There is a huge role for derivatives. In

fact, the situation is tailor made

because of the gap between uh the time

you sew and then the time you harvest

and take it to the market. Uh their

forward instruments are fantastically

tailor made for hedging the farmer's

risk etc. So there I think we should

make a distinction because it has got

very specific uh maturity period and

it's not exactly people will still

speculate on it. Those who are not in

the business of either buying farm

products or selling farm products will

still uh use them to speculate and uh

but but they will be fulfilling an

important role for the farmers also.

They'll be taking the other side of the

trade from the farmers. Correct. And

again and farmers don't have to buy

short-term instruments. they can buy

exactly the instrument that is required

for their to coincide with their

harvesting time etc. And we do need to

use them and because I think this is

exactly a case where we cannot paint

everything with the one brush. I think

uh in the case of um uh agriculture uh

you are absolutely right. Uh crop

insurance is we have tried multiple

variants but we have been somehow overly

cautious about using uh derivatives as

hedging instrument. there they have a

much bigger role to play and we can and

we should be using them.

>> Okay, I'm actually going to move to um

service import and export the service

trade. I have personally seen my digital

bill creep up.

>> Every service that you use, OTT

platforms, a blue tick on Twitter, um

Dropbox subscription and then I looked

at so when you when you see something

and you try and relate it to big data

and I saw that 2024

India had a trade deficit of $102

million on the service side. From a

surplus, we've gone to a deficit. US now

runs a $102 million service trade

surplus which earlier used to be in our

favor and this will only increase

because of the AI services we are buying

uh this is US data

>> Mhm. 2024 102 million

>> million

>> million not million million I mean look

it's just shifted

>> from uh from a Indian service trade

surplus we've gone into a deficit just

last year

>> bilaterally but overall India has a huge

amount

>> no no no bilateral just bilaterally

>> right right

>> my question is is it I know service

tariffs are very difficult to implement

is this could this be part of the

bargaining table in any way because

um this bill is only going to increase.

We are going to be importing far more

especially with AI agents.

No look again it's a very valid question

and I'm not the right person to answer a

because first of all the m magnitude

what you mentioned is still relatively

small 100 million in a trade of overall

sort of the two-way trade of roughly

around uh what is the total trade is

about what uh our trade surplus with the

US is considered to be about 40 billion

uh dollars I think total trade is about

200 close to about somewhere between 180

$200 billion so 100 million is still a

very small sum and digital services tax

is sort of a contentious issue and so on

and I think the one answer is we need to

grow our own homegrown champions on and

and and use them that is why there was a

lot of buzz last month about the Indian

equivalent of WhatsApp Aratai etc. I

think the more we allow or more our own

entrepreneurs are able to produce those

product whether it's an AI app or a uh

browser or a messenger messaging app

it's messaging app etc. I think those

are the ways in which you kind of do

exactly what you are doing on the

merchandise side. you have to uh

indigenize the sources where of of

products and the vendors and uh so I'm

not sure that uh a digital tariff is an

answer uh because that will that has its

own political economy dimensions uh in

the global context and whether even it

is possible to enforce and what will be

the quit proco etc those are all matters

of detail I would say the answer lies in

developing our own product capability

because we have all been services in

service sector. We have been providing

servicing capabilities in our services

sector. The important thing is to

develop the product capability.

>> And in hindsight, China has been really

ahead of the curve by just stopping all

of the western digital

>> digital. In some sense, you could say

that. Yes. Yes.

>> Yeah.

How do we So, we are in the middle of

trade negotiations. We are shooting

right now on 30th October. We are uh we

don't know whether the trade deal with

the US will happen or not.

China has strategic advantage. US has

its uh bully power right now. How do we

weaponize our consumer market in

international trade? What what do we

have? We have a market. And also again

I'm relating it to the whole macro story

of poverty decline of middle class

rising of the middle class becoming

hnis. So we are on a path of

>> yes

>> uh increased consumption we cannot deny

that this is happening

>> yeah yeah

>> can weaponize it? I think weaponizing it

is in the is not that easy because it is

amorphous and diffused as opposed to

having a product to sell to the world

because a consumer by definition

can choose from any product. It could be

domestic or it could be import from A

rather than B. And therefore that is why

it is much more difficult to weaponize

the market. much of the uh movement of

uh manufacturing from the western world

to China happened partly because of the

market but also partly largely because

of their low cost of production base. So

that is the uh sort of the hook there

rather than the market alone

apart from of course the availability of

skilled workforce etc. So weaponize to

use your language to weaponize a market

that much more difficult to weaponize

your manufacturing base or if you have a

company that you are selling to the

outside world without which the world

cannot function. That is a much easier

way to weaponize it than to weaponize a

market. Uh so because consumers can you

are not in your control. They can go

they can go anywhere including buying

their own country uh products and

services. So I think uh but nonetheless

it is still not at a critical uh stage

where you can really start weaponizing

it. I mean probably to to to make that

happen you may have to cross a certain

size threshold before that becomes a

very important magnet rather than a

weapon. I think we are probably not

there yet in my opinion.

>> Okay. Okay. So I'm going to move to

missselling by banks your economic

survey 2324

>> I have page 10

>> where you say quote product misselling

is too rampant to be dismissed as an

aberration of a few overenthusiastic

sales personnel

>> the same can be said about the insurance

industry as well uh unquote and then in

June 2025 Ministry of Finance asked

banks to stop offering incentives on

insurance sales and then RBI in June

said that they will frame rules against

misselling of insurance products.

>> A small background uh 2009 was the

Swarup committee report, Ministry of

Finance, 2015 Bose Committee. My

disclosure is I was part of both. The

problem has been identified, nailed, the

offramp has been suggested from 2009

within the ministry of finance. This was

an initiative from within the ministry

and it sort of hinges on in finance it

is that incentive right I can get the

economic agent to do the thing I want

her to do

>> by placing the incentive in a certain

place we we can understand the mutual

fund industry has used this beautifully

>> right

>> um that has not happened in the

insurance industry

why has it been so difficult to change

the incentive structure in especially

the life insurance indust industry.

That's part one of the question and I

will now circle back to the earlier

thing where you said that you have to be

prescriptive on the regulation and I

will ask a second question which says

that

uh a buyer beware market is not possible

in retail finance.

>> It'll have to be a seller beware market.

>> Sure.

>> We are not even near that. Disclosures

don't work. They are opaque. I mean you

said that you know Mr. Bhavy used to

spell out the font size etc. I mean in

in the earlier days in SE that's what

you said. No I I look I think uh this is

the uh what shall I say we we also have

the target of increasing the penetration

of insurance because people don't think

of insurance at all. So there are

objectives which seemingly can uh sort

of be at odds with one another but

definitely the ministry has taken the

view and as you pointed out RBI I think

there are uh lots of uh uh internal

guidelines that are happening and I'm

not privy to them probably uh you should

be posing this question either to the

insurance regulator or to the secretary

department of financial services uh in

terms of what are the specific actions

that are being taken to discourage this

misselling of insurance products by

people who don't have any understanding

of the actuarial uh nature of the

product and to whom it should be sold

and what are the downside and upside how

easy it is to follow the the fine print

etc. I I think these are all very

relevant questions and I'm not exactly

up to date on where the matter currently

stands in respect of the actions taken

by the government with respect to

discouraging this uh this particular

misselling particularly of this bank

assurance products.

>> Yeah.

>> But but you are saying that this is uh

part of the direction that the

government is thinking. I think as as

you yourself read out uh I think the

minister has herself been very clear

about it and RBA has issued these

directions and the ministry also and we

flagged it in the economic survey

because there were many instances of

that uh coming and it is I I think it is

something that the ministry is very

clear that it shouldn't be happening and

it also in a way um the insurance agent

industry is given our under penetration

it is a huge huge area of employment for

having specialized insurance uh product

trained people to be selling this

product. And if we are allowing um a

typical bank official who doesn't have

any understanding of the insurance

market to sell this along with several

other things that they are selling then

we are also actually not making use of

the specialized talent that is out there

in the insurance industry to be able to

sell this product on a better

information basis. So I think that is

where that is the direction in which we

we intend to travel.

>> Okay. Because just simply according to

me it's not who is selling it is why

they are doing it.

>> It's not the

>> no in the old days also they were

selling it. I mean you had insurance

agents coming and talking to your

parents or my parents or grandparents

about the need to have a you know life

insurance etc. Yes, there has to be some

promotion has to happen because human

nature is to always uh dismiss these low

probability once in a I mean literally

once in a lifetime event as something

that you don't really insure for. You do

have to because buying an insurance

doesn't come to humans naturally and if

you read Daniel Canman he he wrote that

humans always don't have a good estimate

of the probabilities of rare events and

by definition death is a rare event and

and therefore we don't feel the need to

ensure on our own unless somebody comes

and reminds. So selling is necessary.

The only question is how undoubtedly

undoubtedly

>> how it is sold.

>> Yeah. And by whom they're not really

selling insurance, they're selling

investment

>> insurance. The pure term product is a

very small maybe 1% of the entire

>> I agree with you.

>> Um business that is done right. So again

anyway this is a long

>> you're right the insurance risk and the

investment risk have to be very clearly

separated and distinguished because the

kind of insurance value you are expected

to get if it becomes dependent on the

investment return that the product makes

and if the client is not made aware of

it and then later on he or she feels

short changed then that is a that is a

that's not exactly is sale of insurance

it is sale of something else and in the

financial markets there are no

guarantees but if you are trying to sell

seemingly a guarantee product but it is

overlaid with the uh wrapped with

investment cover and that therefore is

subject to market fluctuations it it

becomes complex. Do you think we should

move not just for insurance and banks

overall retail finance a seller beware

model rather than a buyer beware and

seller beware is a suitability world

where

>> sure

>> the person who's selling really has to

do the due diligence at your agent stage

do you really need a life insurance

cover but at a person in his 30s with a

family to support of course needs a life

insurance cover or do does an

80-year-old need a small cap allocation

in his portfolio?

>> Probably not. Right.

>> So there is a suitability metric

>> in retail finance.

>> So do you think that India could be one

of the first countries in the world to

move from buyer beware which is a very

free market Chicago school sort of

>> idea to really a seller beware market?

No, I think it it is in line with what

we discussed earlier that in the

financial sector because of the

ramifications it has and the sort of the

snowballing effect that it is normally

prone to and secondly competition can

actually lead to excessive risk-taking

on the part of the institutions. uh a a

seller beware model probably has to take

precedence over buyer beware but it

should buyer beware is about financial

literacy in some sense and you need to p

you need to continue with that but it is

it'll always be uh elusive as I for

reasons discussed earlier so I think it

has to be both but definitely much more

honest has to be placed on the uh

sellers than on the buyer because

sellers have more information and it is

they who choose what information they

are disclosing to the uh uh buyer and

therefore given that they are in

possession of the possession of the

information and therefore can choose to

be choose to ration it the obligation

must be imposed on them not to ration it

and how they communicate it. Therefore,

I I I very much uh uh am philosophically

inclined to go with your view that a

seller obligation model uh is necessary

in the financial sector.

>> Okay. Yeah.

>> All right. Okay. So, last question of

course on growth. We've been battered

for a while. Black swan is now the norm.

>> Mhm.

>> Um so there's been crisis last almost 8

to 10 years. Every year there's been a

new thing happening.

Despite all of it, we've not done too

badly at all.

>> That's right.

>> Right. We've done fairly well and we'll

take it as said that you know that there

has been political leadership. We'll

take that as said. What has really what

else has really worked?

>> Sure. No, no. uh first of all the way we

managed uh covid I think as we discuss

in the in different context humans by

nature tend to take what has been done

as granted and then we move on to the

next ones that are not yet done kind of

thing. I think if you look at how many

other countries developed or developing

handled covid the fact that we kept our

uh fiscal relief measures and monetary

relief measures targeted and finite

rather than uh without uh time or

monetary limits. That's a very important

thing which is what enabled us to bring

it back from 9.2% down to 4.4% in terms

of the fiscal deficit ratio. The other

thing we have done well is to get the

physical infrastructure constraint

removed. I wouldn't say removed largely

alleviated or relaxed. I mean whether

you look at uh the highway length or

number of airports or the turnaround

time in on average in Indian ports uh

all these things have also relieved the

supply side uh constraint. The third

dimension is um because of the broader

adherence to fiscal stability, the cost

of capital has come down uh and and

barring uh food prices induced cyclical

increases in inflation, inflation also

has been uh kept on leash. The average

uh inflation rates over the cycles is

coming down and that has given a huge

layer of macro and fiscal and financial

stability. then it is easy to build the

macroeconomy on top of that. I would

consider these three as more important

most important contributors to the fact

that our growth performance compared to

everywhere else developed or developing

postcoid and the fiscal uh debt and

deficit levels being in control. I would

attribute that to these three factors as

the primary factors. We've got our house

clean. We've got everything in

furnitureures in place.

>> But uh and now there's a huge demand

boost. The government has given direct

and indirect. Are we going to see that

private investment coming?

>> So Monica, I think it's uh it's correct

to see as a demand boost, but it is also

correct to see it as a supply boost

because without demand visibility, the

private sector will not invest.

>> Right. So it is not as if the government

is uh moving away from its last six

years of public investment emphasis to

uh demand boosting emphasis. A demand

boost is actually also to facilitate

private sector taking over the

investment battle. And by the way if you

look at the 2425 data which of course

national income numbers will come in

February next year we will see the

breakdown of how capital formation has

been done by private public sector etc.

But bottom-up corporate data tells us

that 2425 the private sector actually

probably spend more than the government

on capital formation. And postcoid you

have up to 2425 you have four full years

of data which means two out of those

four years 2122 and 2425 the private

sector has done very well in capital

formation. 2324 was moderate and 2324

was a disappointing year and now of

course 2526 is too early to say. So in

other words it is not as if the private

sector with improved balance sheets and

profitability etc has not been

investing.

>> It's it's a mixed record not a

disappointing record and it is mixed

record is understandable given the state

of the world and given the

uncertaintities that we are facing. So

it is I would say definitely a glass

half full story not a glass half empty

story.

>> Right. Right. So you said a little

earlier that uh you can't force a

consumer to buy certain product. The

product has to meet the consumer's

requirement.

>> Now I'm going to stitch it to the trade

and tariff story that if the deal does

go through we are looking at reduced

tariffs. We've already done a lot of

reduction in our import tariffs for

foreign goods.

>> Yeah.

So I worry that when that happens, when

the trade deal happens and suppose we

were to lower our own import tariffs,

then instead of the domestic goods, what

if we start importing more?

>> No, the good thing is the size of the

market in this country is so big that as

long as you are competitive and meet the

quality expectations, there is a space

for everybody. That's the advantage of

size. I mean all said and done uh

foreign trade only constitutes a small

portion of your overall consumption

basket. So even if it increases at the

margin

>> I think uh we we have shown that where

we put our mind to it our products can

compete and we have competed and and

taken over and gotten market share

whether it is domestically produced

automobiles or other kinds of consumer

durables etc. So I don't think we should

be worried about it because it is

actually a a useful prod for getting the

domestic uh manufacturing capability

both in terms of uh quantum and quality

of uh international to be of

international standard.

>> What are Q2 growth numbers looking like

if you look at the high frequency

indicators? I think Q2 actually uh might

turn out to be a positive surprise

pretty close to the kind of numbers we

got for the first quarter.

>> 7.8

>> I know not I didn't say 7.8 kind of

thereabouts I mean basically 7.8 8

surprises on the positive side. I'm

saying that it it will be of a similar

nature rather than of a disappointing

nature.

>> It will be a positive surprise rather

than the number itself.

>> That's what I that's what I was

indicating.

>> Yes. Yes. Okay. Um we're at the end but

uh you know from our viewers we get a

lot of requests to ask like people like

you what is it that you would recommend

for them to read

>> and maybe not specifically in this

specific area of finance but maybe

something outside

>> something uh you have found

inspirational.

>> Sure. Sure.

>> Or also just one basic book on finance

which is not let's talk money my book

but something else.

It's uh the gosh there are plenty of

books uh to to to think of here. Uh when

it comes to uh finance I think other

people's money by Mr. John K

>> okay

>> is a good book to to read and uh Mr.

Janis Varufakis, the former finance

minister of Greece,

>> uh his book uh the global minotaur

was was definitely a a good book to

read. And back in the early part of the

new millennium, you had uh Frank Potno's

uh fiasco spelled as fi. A s.o.

Those are the books that come to my mind

initially when it comes to finance. When

it comes to non- finance, I think u I

have been very impressed by Michael

Lewis's The Undoing Project which was in

the in the life history of Mr. Daniel

Khan and Amos Weski that book. Um and

more recently I would definitely

recommend uh the material world by Ed

Conway which looks into many of the

materials and the rare earths and the

minerals and materials we use from

smartphones to cameras to cars to so on

how they are found where they are found

how much of energy goes into getting

them out and processed etc. It's a very

fascinating book that makes you think

about the tradeoffs in energy transition

etc. and very very recently I think I

really enjoyed reading Chris Miller's uh

Chip war.

>> Okay.

>> Yeah. I mean I would I would I think

this is a good reading pretty good

reading list uh for for one for one

conversation.

>> Yeah. Thank you. Thank you. This has

been fascinating. Thank you so much.

>> You're welcome.

>> It's good to know that we are on course

with a growth story. I do these

conversations so that you can make up

your mind, join the dots and think about

what the India story looks like. Do tell

me who you would like me to invite next

for these conversations.

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