A Japanese assignment

Prime Minister’s Special Envoy to Japan, Ashwani Kumar, on what his new job entails and other issues

Ashwani Kumar, former Union Law Minister, who quit some months ago following the controversy over his Ministry vetting a CBI report on coal allocation, has been appointed Prime Minister’s Special Envoy to Japan by Prime Minister Manmohan Singh. He speaks to The Hindu about his new role. Excerpts from the interview:

You have been appointed as the Prime Minister’s Special Envoy to Japan. What is your mission in Japan in the context of the new assignment?

The mandate given to me is to continue and reinforce at the highest levels the engagement between India and Japan. The idea is to send a special signal to Japan that India attaches great value and significance to this relationship, especially in light of the forthcoming visit of the Imperial Majesties to India. I will meeting the Prime Minister and the Foreign Minister there along with CEOs of leading Japanese companies.

How did the 50 billion currency swap announced in G20 by the Prime Minister come about, what is the background?

The world knows and so do we, Japan has huge capital and technological resources and it has throughout the last several years been very generous in terms of lending of funds. Considering the state of our economy and the challenges we are facing, raising the swap arrangement from $15billion to $50 billion has had immediate positive impact on the rupee. I think that this one particular gesture by Japan in itself shows the kind of warmth and importance that it attaches to this relationship.

Do you think that at a time when America is widely being seen as withdrawing liquidity they had pumped after 2008, Japan could play contrarian by pushing more liquidity, which it is doing now. This is also helping India. Is it planned or just a coincidence?

The fact remains that the Japanese also realise that after China, India is the single largest market in this region. It is part of a conscious policy, as per what I can make out, within Japan that they would like to diversify their global economic engagement without necessarily sending a negative signal to China but in order to spread its risk wider. India figures prominently in this strategy.

Today, in India, 926 Japanese companies operate but in contrast there are 10,000 Japanese companies in China. There is a difference of 1:10 in terms of level of economic engagement. The Indian market is second to none. In fact, in certain terms of purchasing power, the Indian market is even stronger than China. Japan would like India to become a large and important investment destination for Japanese companies.

Is the higher level engagement with Japan also part of the Indian strategy of working economically more with the East?

I would like to stress that our engagement with Japan is not limited to strong and vigorous economic ties but this relationship has now become a multi-faceted and multi-dimensional one. It encompasses defence co-operation, joint naval exercises as part of the co-operation, the security of the sea base which sends the right kind of signals in order to ensure in piracy and terrorism, interests of the both countries are jointly protected.

Will the Japanese CEOs there be committing more capital at a time India needs more capital for infrastructure sector?

We need Japan to collaborate with India particularly in the development of the infrastructure sector. Japan has to help us in both technology material resources and human resources. And no country in the world, in my view, has today greater competitive advantage than Japan. To start with, we need to re-invigorate the Delhi-Mumbai Industrial Corridor (DMIC) and the dedicated freight corridor. These are flagship projects involving lakhs of crores of investment. We need to address the hitches pointed out by the Japanese side in the execution of these projects. I talked to the Japanese side, that these are linked to Official Development Assistance (ODA) finances. And one of the requirements of financing under this ODA scheme is that contracts have to be given to Japanese companies. In our processes, we can only award contracts under competitive mechanism during the tender processes. So we need more Japanese companies to bid for us to comply with our tender processes which at present, is not happening. We need to have three to four equally competitive bidders.

During the Indo-Japanese business and economic working group meeting recently, the Japanese Trade Minister and Economic Minister talked about studying the feasibility of setting up a Japanese Electronic City in India. What is your opinion on this?

The electronic city is a need and we welcome it. I talked about Japanese clusters, Japanese villages and small cities where the Japanese expatriates can live in the same environment at one place. The school for Japanese children, the karaoke, the music, the food, everything is very important for them. We have established one such cluster at Neemrana in Rajasthan and the Haryana government is willing to give land for another hub near Faridabad and Sohna. The idea is to tell them we welcome them whole heartedly. We would do all that we can to make this relationship mutually beneficial.

Coming to your own circumstance in which you quit as the Law and Justice Minister, can we now assume that things are back to normal? How did the PM choose you for this new assignment?

The new assignment has nothing to do with my resignation from the Cabinet. My resignation was on count of the fact that the Opposition had stalled Parliament and I thought that in order to avoid any unnecessary controversy it will be better for me to resign to allow Parliament to function. That was the only reason for me to quit. As part of duties of the Law Minister, it was my function to advise any wing of the government on any important matter before the Court. In its affidavit filed before the Supreme Court, the CBI has stated the suggestions received during discussions in my office where the Attorney General, the Additional Solicitor General (ASG) and other officers were present, no changes of any kind had been made to the CBI investigations into Coalgate. The central theme of investigation remains unaffected. There were minor changes that were also mentioned in the CBI affidavit.

Therefore, you think the Supreme Court was convinced that no substantial changes were made?

The Supreme Court will decide what it has to decide. But I can tell you the apex court has not said a single word against me in its written order. It is well settled that the courts speak through their orders and not through their observations.

Do you feel the Supreme Court has said nothing against you?

I was never charged. There was no accusation against me in the court. I mean, I am not before the court. Somebody said that this particular consultation should not have taken place. I am saying that under the projection of business of transaction rules of the government, the CBI can go only to the Law Ministry for advice as long as the advice does not materially and adversely affect the investigation, something the CBI had told the court has not happened.

Do you think that the Attorney General in some sense could have avoided saying that he had not read the report at that time?

The least said the better. Let my silence speak for myself.