 Well, Minister, Excellencies, colleagues, friends, visitors, let me begin as always by acknowledging and celebrating the first Australians on whose land we meet and paying our respects to the Ngunnawal, the elders of the Ngunnawal people past and present. It's my very great pleasure as Chancellor of the ANU to welcome the Honourable Shri Arunjaitli, India's Minister of Course for Finance, Corporate Affairs, Information and Broadcasting to the Australia National University to deliver the 18th KR Narayanan aeration. The Narayanan aeration is presented by ANU's Australia South Asia Research Centre under the directorship of Professor Raghbendra Jha, who we're delighted to have here with us, and operates with the support of the Australian governments, Australia India Council, which I should perhaps mention in deference to Minister Jaitli's status as a well-known cricket tragic, that I had the pleasure of launching that council with Alan Borda at the MCG back in 1992 when I was Australia's foreign minister. Narayanan aeration have been among the major public lectures at ANU since they began in 1994. They're given, of course, in honour of the late Dr. K. R. Narayanan, who was President of India from 1997 to 2002, and the first and so far the only member of the Dalit community to occupy that high post. In earlier incarnations as India's ambassador to both China and the United States and a number of other major countries as well, Dr. Narayanan was once described by Nehru as the best diplomat of the country. That's a pretty formidable accolade given the quality of the India's diplomats and statesmen and stateswomen, as I will know, but in the case of Dr. Narayanan, it was thoroughly well-deserved. I was fortunate enough to get to know him personally quite well, not least when we inaugurated together, when he was Vice President, the ANU's Australia South Asia Research Centre in 1994. And it's hard to think, really hard to think of a more charming, thoughtful, and principled servant of his own or indeed any one's country. So ANU was absolutely delighted to host these Narayanan rations both to honour chaos memory and to recognise his many contributions to India and to Australia-India relations. I personally have had quite a long love affair with India since I first visited there as I told the minister in the 1960s travelling for many weeks around the country in third class trains. And I've been back many times since as a politician, NGO head, and now as ANU Chancellor. On any view, India is not only a country whose land and peoples are an absolute delight to get to know, but it's a country which matters, country which matters. India's civilisational pedigree has few rivals anywhere in the world and its economic and strategic weight both in the region and in the world is now undeniable. Indian economy, India's economy is now the third largest in the world in purchasing power parity terms and it's overtaken China as the world's fastest growing major economy. And I think there is moreover every reason to be confident with India now having a government as we'll hear committed to economic reform and to deepening its linkages with the rest of the world. It's reasonable to be confident that that momentum will continue. Our speaker today is very much at the helm of these changes. His finance minister and the Modi government, Minister Jaitley has been spearheading its very ambitious economic and fiscal reform agenda. He came to that role, Minister Jaitley, with a very big political reputation, as many of you will know, born of his career as a long-serving BJP strategist, both in Bihar and nationally, as a formidable competent practicing lawyer, as a long-serving and very highly regarded leader of his party in the upper house and I know how that particular job is. And in his earlier life, something which I can also identify, although I was never locked up for my pains, as Aaron Jaitley was, he was a student leader and he was an activist in the civil rights movement in India at the time of Indira Gandhi's emergency. Minister Jaitley's and India's success in advancing the ambitious reform program now laid out, including in this crucial area of financial inclusion, on which the Minister will speak today, really does matter a great deal to the whole region and certainly matters to Australia. Our economic interests these days are very much converging, with more and more complementarities becoming evident. So too are the geostrategic interests of our two countries converging in a number of important areas, driven as they are not only by Indo-Pacific geography, but also by our common commitment to democracy and very important in international relations, our common commitment to a rules-based international order. So they're really good for all these reasons, not be a better time to be welcoming Minister Jaitley to Australia and to Australia's international university, which I'm delighted to be able to do. We'll now hear briefly from his Excellency Nadeep Suri into his High Commissioner to Australia to read a message from the current President of India, his Excellency Sri Panna Mukherjee. And then I'm afraid I have to apologize for in my absence, because I told the Minister I have to rush out to cheer a national telephone hookup in a few minutes time. In my absence, we will then hear from Minister Jaitley himself speaking on the new economics of financial inclusion in India. Welcome to you all, welcome to Minister Jaitley and we're delighted again to have you here at ANU. Over to you, High Commissioner. Thank you very much Chancellor Evans. It's my privilege to read out the message from the President of the Republic of India on this very important occasion. I'm happy to learn that the Australia-South Asia Research Centre at the Australian National University is organizing the 18th Kiara Narayanan Oration on the theme, the New Economics of Financial Inclusion in India by Sri Arun Jaitley, Honourable Union Minister for Finance, Corporate Affairs and Information and Broadcasting at the Australian National University on the 31st of March, 2016. While the Indian economy has made considerable progress in accelerating economic growth and poverty reduction, more work remains to be done to involve a larger proportion of the population in the formal financial sector. World Bank data for 2014 shows that the proportion of Indians aged 15 and over with bank accounts was lower than that for a number of other countries. The proportion of women and of the relatively poor with bank accounts was even lower. A rapid increase in financial inclusion would mobilize savings, create new opportunities for credit off-take and facilitate increasing prosperity for our citizens. The new Jandhan Yojna is a significant step in this direction. Further, the use of biometric-based Aadhaar cards for direct benefit transfers to bank accounts is an efficient method of removing intermediaries in the process of administering government subsidies and welfare payments. The fact that most of these operations can be done through technology embedded in mobile phones should further improve the efficiency of the financial sector and lead to a quantum jump in financial inclusion. This focus on financial inclusion is timely and I wish the event all success. Signed Pradham Mukherjee, President of India. The Chancellor of the University, Vice Chancellor of the High Commissioner, Professor Jha, ladies and gentlemen, thank you very much to the Australian National University for having invited me for this year's K.R. Narayanan oration. K.R. Narayanan was one of the most distinguished diplomats and seven servants that India produced. He came from a background which reflected historically the disadvantaged groups in India. He grew up amidst all odds and turned out to be one of the extremely brilliant diplomats that India produced and eventually went on to become the President of India. On a personal note, I happened to work closely with him when he was the President because I was sworn in as a minister by him for the first time and as a law minister in the government at that time I had to deal with the President quite regularly and an extremely sharp mind, a strict constitutionalist given to rules, good governance, good principles. That's the memory of Dr. K.R. Narayanan that we all have and I am indeed privileged to join the list of some very eminent people who in the past have delivered his annual aeration itself. I was asked by the university to send a written text of the address which of course, Professor Jaha would need for reasons of publishing but I've always believed that listening to people read out texts becomes quite challenging and therefore I'm not really going to read it out but refer to some of the basic points which are set out in the text itself. While we speak in terms of reform and growth in India, a lot seems to have happened in the last two and a half decades, in fact the Chancellor in his various capacities as a former foreign minister and even otherwise was mentioning that he's traveled extensively to India and his initial memories seem to be of the 1968 Indian train traveling in what was then called the third class compartment. We've come a long way since then. He did mention my fondness for cricket and if I go back to where India was in those decades, I remember having read in Steve Wars autobiography, when he first made his debut in cricket, he came to India in 1987 to play in the World Cup and from Mumbai he mentions in his autobiography that he would regularly telephone his girlfriend and the Indian telephone system at that time was that he had to sit next to the telephone the whole night because he'd be added on to what we used to call the trunk call and at some odd hour in the middle of the night the call would be connected and while he was speaking to his girlfriend, every three minutes the operator would say do you want me to continue the call? We've come a long way since then. Today we have, in 1995 our tele-density was 0.8%, less than 1% of Indians had a telephone but that's just about 21 years ago. Today it's over one billion phones and that's only one illustration which demonstrates as to where India has moved on from. An economy which was essentially an economy of shortages. I remember when I first became a member of parliament, the transformation was still taking place and each one of us used to be given a discretion and the discretion used to be that we could allocate gas connections to people, we could allocate a lot, telephone calls to people out of turn and suddenly within a year or two I found that nobody would come to me to ask for this favor because we were slowly turning from an economy of shortages to surpluses and my then leader, the former prime minister, Mr. Vajpayee said that you are only distributing telephones and gas connections, he said that he recollected that in his earlier days as a member of parliament, he also had a discretion to allocate HMT watches to people. So they were all allowed two HMT watches every year which they could allot to people out of turn and that is how in which the manner in which regulated economy in India had worked but I must say the direction we followed from 1991 onwards indeed served us well. It improved upon our growth rates, it improved, it brought down our poverty levels. Last week I had an opportunity to deliver an annual lecture at the National Minorities Commission and I was extremely pleasant with the research I did for that lecture that the maximum depletion maximum depletion of poverty rates, even amongst the minority communities took place post 1991. So as India grew and the economy improved because prior to 1991, we were quite happy and satisfied as an economy with a smaller base growing at about two to 3% every year and the world would sarcastically refer to this two to 3% growth rate as the Hindu rate of growth and this was incapable of either depleting poverty levels in India or giving enough resources to the state in order to improve the lot of people which had to be addressed. But post opening out in 1991 successive governments did their little bit and the present government seems to be taking that to its logical conclusion. But one important aspect of the economic debate has been that have reforms really helped the economically and socially deprived sections of society and in the initial years, whereas it was for the then governments a little more difficult and challenging to market reforms because the arguments was that this really has helped businesses, this has helped private sectors to grow, but has it really impacted on the life of those who otherwise have been used to living in adverse circumstances? And this includes a very large section of population. We have large sections of schedule cast and schedule tribes which are historically disadvantaged groups amongst the backward cast. We have the most backward communities which didn't have any sources of employment. We of course have a significant section of the population at one stage it was more than 50 to 60% which lived below the poverty line. We still have a considerable section which leads that life. We have some groups of minorities which have not economically prospered as well as the other groups. And therefore how has this entirely impacted upon them? Sectorally if we see the growth of the Indian economy our services sector seems to be the best performing sector. And even in otherwise a global slowdown environment our services sector even today grows at about nine to 10% a year. And that's a very rapid pace of the growth of the services sector. Our manufacturing sector can do better but it's our agriculture which is the real challenge. And if you look at the inequalities created by the people in the rural areas almost 55% of India's population even today is dependent on agriculture. And being dependent on agriculture the share of agriculture has shrunk to almost below 15% of India's GDP. And that only shows that 55% plus of the population depends on this 15% of the resource and the income. And therefore this community is also economically disadvantage it's a hard reality which has to be kept in mind. What is then the Indian model of dealing with this? I think one of the mistakes which was made in the pre-liberalization era was particularly in the 1960s and 70s that we concentrated on distributive justice, distribution of the existing resource and did not concentrate on increasing productivity. Both were essentially necessary. And that is why the 60s and the 70s from the point of view of the Indian economy virtually became a wasted period as far as the economy is concerned. Post-liberalization the criticism was that you are growing faster but is this advantage of the fast growth rate being distributed enough? And therefore slowly governments in India have now converged upon an economic model where opening out allowing investment allowing market dominated economy to grow faster and higher growth rates is the model. So the question which arose was that is the pull-up effect or the trickle down effect whichever way you call it adequate enough to take care of those who live in India below the poverty line? And the answer was unhesitatingly no. The pull-up effect does take place but it's not adequate enough. And therefore with higher growth rates you need higher levels of revenue and money available in the pockets of the government where in addition to giving a boost to the economy the government can also use it for the purposes of a large number of poverty alleviation schemes. So the Indian model in that sense now is more that of a market economy but with a social conscience so that the resources earned by the state can also be used to service a section of the population to expedite the process of their getting out of these poverty levels. And that's a model in some larger or lesser measure successive governments in India have been following enough. Where do we stand today before I come to the subject of financial inclusion? Where do we stand today? In terms of growth rate it's a challenging situation globally for the whole world. The entire global economy is facing one of its most acute challenges in recent history. And I think the new norm itself is unpredictability. It is not stability. We are not sure how long this phase is going to last. The oil prices, the commodity prices have hit a rock bottom. Growth rates across the world have been impacted. And just two and a half years ago the economist did an important analysis on the BRICS economies and they mentioned comparing Brazil, Russia, China, South Africa and India. And the observation was that there was a possibility of the I in the BRICS that's India being knocked off. Now that was what was being anticipated about two to three years ago. And today the rapid changes in the global economic order which have taken place thankfully have not made that analysis come true. But the I seems to be a faster growth rate. Are we in India satisfied with this? Well, if you look at how the rest of the world is doing I think we are rated as the fastest growing major economy in the world. But if we measure it by our own standards we believe we can do slightly better than this. As the financial year in India ends today the 31st of March we hope to finish this year at about 7.6% growth rate. So our basic parameters seem to be doing well. Last year it was 7.2%. Hopefully we'll be able to maintain or even increase improve upon this figure depending on certain variables in the next year. Our basic parameters are current account deficit is well under control. Inflation in India quite well under control. Last 16 months in a row the wholesale price index has been negative. The consumer index has been in the range of about 4 to 5% at the highest. The interest rates are slowly coming down. Foreign exchange reserves are the highest ever. And till about August last year, rupee other than the Swiss franc was the only currency which was able to maintain its base against the US dollar. But post the devaluation in China the rupee also got somewhat adversely impacted and the parity got somewhat disturbed. With the basic parameters of Indian economy doing well, where do we feel we can do better? I think there are three or four variables. The first variable of course is the global tailwinds. Today the global situation is obstructive to very high rates of growth. For one our exports are very adequately are significantly impacted because global trade itself is shrunk. And therefore in terms of values it has shrunk because of the oil prices and the commodity prices. Even if volumes remain the same in value term it seems to have shrunk. And therefore the global situation has adversely impacted on our exports. That is one area of serious challenge that we have. We've had two years of bad monsoon. Fortunately in Indian history you've never had three bad monsoons in a row. So on the law of probability we keep our fingers crossed this year. And monsoons, we don't have a food crisis ever in India because we have surplus. But it impacts on the purchasing power of the rural population. And therefore it has a spiral impact on industry on manufacturing, on demand in the market itself. So that's an important variable which can add to India's growth itself. Third of course is our ability to continue with the reform process and adding to its space. And the fourth which is something which hasn't helped the rest of the world but it has helped us. The low oil prices particularly the low commodity prices have helped us because we are net buyers. And therefore we've been able to save a lot of money on account of particularly the fall of the oil prices and divert that resource into more useful areas of operation. How do I see the reforms continuing in India? I think India still has a great appetite for reforms. There is a clear realization in India that India post the 1990s is a much better country to live in, it's doing much better than it was prior to that. And therefore there is a larger political consensus that governments both at the center and the states continuing with reforms. Reforms unleash energies of Indian. They allow free flow of capital into the country. They remove all forms of restrictions. And therefore with the strength of the entrepreneurship the economy itself is able to grow. So as a part of the reform process we've opened up the economy significantly. Almost all sectors are open to foreign direct investment. In Greenfield investment we have the largest anywhere in the world which is coming into India. In the last one year foreign direct investment itself has increased by 40%. In addition to this we have, we had a bad reputation for not being the best place to do business in. And therefore we had to reform our systems. And therefore considerable work has been done in this regard both by the central government the states government. And therefore there is a significant amount of ease which has come in. We've moved up the global rankings. We had a fairly aggressive taxation system a direct tax system which we rationalized now trying to bring down taxes to a global level. I was speaking to my counterparts in Australia our taxes are more reasonable than the ones you pay here. Indirect tax of course you've been a decade and a half ahead of us. We are now trying to implement the goods and services tax. And economists do feel that if we are able to implement it over the next few years a successful GST is capable of adding to India's growth story itself. Our main concentration in terms of expenditure now is into rural India because one of the objects of public finance has to be to fill up the pits wherever you find them. And of course on creation of physical infrastructure. I think these are two very important areas where public investment has been going. Our infrastructure almost every part of it whether it's the railways, the rural roads, the national highways, the ports, the airports, the power sector. I think these are all areas where there is a huge amount of activity and growth taking place these days. And they require a lot of investment and I quite candidly concede that kind of investment is certainly not available in India. And therefore we've been reaching out to investors pension funds, superannuation funds world over to come and invest in India. And by keeping this entire reform momentum on we intend to add to India's growth story. Now one aspect of financial inclusion when I spoke in terms of investment in the rural areas is concerned is to give the benefit of this increased growth through those sections which have so far not received the benefit. So what is our long-term planning about rural India? President Narayanan successor, President Abdul Kalam used to, his favorite subject for discussion used to be that India must end up giving urban-like facilities to rural areas. Now that may be a great vision but a very challenging vision to seriously implement. And therefore as a part of an inclusive growth bringing the rural areas, what is it that is happening? We have 700,000 villages in India. And by 2019 we intend each village being connected by a regular PAKA road. Now the road program for the villages in India is one of the most successful programs. It's a program where every member of parliament is involved in because he knows that he has to visit those villages and people then shout at him because they don't have access. So everybody is involved in that whole process. So this year we've increased the allocation. This is entirely being done by the government and this year we've increased the allocation between the central and the state government almost three times so that we could expedite this whole process of rural roads. It's a successful program, it's a work in progress and I think it puts in a lot of money into the rural areas. The second thing, out of these 700,000 villages we found that 18,000 of them were not electrified. And therefore the prime minister has given a call that in the next 1,000 days, all 18,000 have to be individually targeted for electrification. We don't want a single non-electrified village in India. And as I speak to you today, last week we crossed 5,000 out of these 18,000 and the indications are that we may be able to achieve this target a little ahead of time. So electrification of all villages, road access to all villages. The prime minister's call for the Clean India, the Swachh Bharat campaign, now speaks in terms of a toilet in every home. So last year we implemented every school in the villages must have a toilet. So that lakhs and lakhs of toilets had to be constructed. We achieved that target 100%. And now there is a huge campaign in which the government is involved. The World Bank is also partly helping us in the finance. Corporate India is putting a lot of CSR money into this campaign. And the idea is to make every home in village and where every home is not possible to make collective community toilets available to villagers in the rural areas itself. Housing for all is a very tall order. And in the rural areas, for people to go in for regular PAKA houses is yet one of the other programs which is on. In order to fund the farmer and bring him into this entire inclusive process, the loan that he takes for his crop, the interest burden on that loan, because of the economic pressures on the Indian farmer, farm holdings in India are very small, is being partly subvented by the central government. Some state governments are also subventing the loan. So in several states, you almost have an negligible interest rate because it's partly being subvented by the center or the state government. So that's one area of helping the farmer. The previous government had started the rural employment guarantee scheme. In fact, I've added to it. I've amended it partly so that it can also result in some asset creation, particularly in terms of water bodies being created in the villages. And the amounts now being earmarked for it are much larger. So that's another methodology we have of a social inflow. Starting from tomorrow, a campaign is now being launched to make sure that the payments that these unemployed people get as a part of the rural employment guarantee scheme, as I'll explain in the course of the talk just now, are directly transferred to their bank accounts rather than the monies first going from the center to the state, from the state to the district, from the district to the panchayat, and then being pilfered before it reaches the farmer itself. Now it's being directly transferred to their bank accounts itself. Now these are various avenues of funding rural India and empowering rural India which are on. What is it that specifically the financial inclusion campaign envisaged? Two years ago, we realized that only 58% of the families in India had a bank account. 42% was completely outside the banking network. And one of the first programs of the government was to make sure that every family, we have about 250 million families in India is connected to a bank. So even if you didn't have a balance to deposit money in the bank, it's not merely that people were supposed to come to the banks. The banks hired employees who were called the business correspondents who went from home to home and reached each one of these 42% who were outside the banking system. So those who were opening bank accounts were incentivized by telling them that they would get a debit card. They would get a facility of an overdraft if they operated that account. And various incentives were given. And in a period of about three to four months, it was a spectacular performance by the Indian banks, particularly the banks in the government sector that we were almost able to add the entire population of India. So it would be stray households now who are outside the banking system as a pattern everybody has come within the banking system itself. Now the poverty levels were such that almost 73% of these accounts didn't have a single rupee in them. They had no money. So how do you transfer resources to these bank accounts? Now in order to do that comes the second limb, which is we all government support that goes, it went in terms of giving cheaper products. I think that's the system which is now gradually coming to an end. And therefore your cash subsidy is directly transmitted to the account of every beneficiary. And therefore you have the central government, the state governments, the local bodies have a large number of support programs in terms of scholarship, video pensions, old age pensions, minorities, scholarship. Now each one of them is now being transferred to these bank accounts which have been opened. So these have become operational and in a period of about two years, today about 75% of these accounts are actually operational. They have money, people operate them. They use the debit card facility which has been given to them. And this has turned out to be one of the most successful programs. Now building on this we have a database of what is called the jam trinity. The jam trinity is the J is the janadan account which is supposed to be these bank accounts. A is an Aadhar card which I will just explain. And M is those one billion mobile telephone connections. So these are the identities people have. We have then created and now it has got a legislative support in parliament. We have now created an Aadhar number which is a unique identity number which every resident in India has. Now already about one billion people have been allotted this. The percentage of adults is about 98%. Though amongst minor children it's still lagging behind about 67% and we are adding about five to seven lakh people per day who get this unique identity. This unique identity has some particular features of the individual as also every individual is now identified by this number. Now this enables us to identify those who need support. There are a large number of subsidies. In India petrol was subsidized, diesel was subsidized, cooking gas is subsidized, food for poor people is subsidized, fertilizer for farmers is subsidized. So all these state support subsidies, the challenge with regard to these subsidies was that they were unquantified amounts which was given to an unidentified section of people. So when the scheme started, each one of us including me were getting the benefit of a cooking gas subsidy. Now there's no reason why this subsidy should have been made available to people like me. So we started a campaign for eliminating those who don't deserve this subsidy. We had a parallel campaign called Give It Up. People should voluntarily give it up. Fortunately for us the oil prices fell so we were able to link petrol and diesel to the market. The cooking gas subsidy now reaches, and if you look at the numbers, the magnitude of the work done, when we opened those janadan accounts, the number of accounts which we were able to open were 210 million, 21 crore accounts. So it was all done in a period of about four months. The cooking gas subsidy now goes to the account of 140 million people each month. So do the scholarships and the other pensions and various forms. So these people have some operational balances always available with them. Now this experiment of Aadha, now that it has a statutory backing, we intend now using it as a pilot project for fertilizer in the first instance, for food in the second instance, and wherever it is possible, we will see if this can be implemented. On cooking gas it has given us a subsidy saving of about 25%, which is a considerable amount because that's all a pressure on the revenues of the central government. And this money can be utilized for helping the various people. And in order to demonstrate this point, as I'll explain later, we've added this as a part of the social security campaign. The third thing that we did was to use all these accounts and offer India outside the government is an un-pensioned society. Most Indians don't get a pension. And there are pension plans, but very few subscribe to it. It's only government or quasi-government employees who get a pension. So I've been saying from day one that there's a need to make India into a pension society. And some of my proposals, the well-intentioned run foul of a certain section because people don't realize the consequences of when they grow old and would have nothing to fall back on. As a result of which we started offering low-cost insurance policies and extremely low-cost insurance policies. For instance, we have about 130 million people amongst these poor people insured themselves for a two lakh rupees of accident insurance. So if a bread owner dies, his family gets at least some subsistence. These are very poor people. And the total amount of premium that was to be paid out of these Janadan accounts is only one rupee a month, which was a normal amount. And therefore to bring people into financial inclusion and social inclusion, I think this is a step which went along further. We had similarly brought in a normal life insurance policy, again, reasonably low-cost. And a pension scheme for them. The two insurance policies have been a runaway success. The pension scheme is still taking time to register because people have not realized the benefits of those outside the government to have a pension program for themselves. I think one day, hopefully, following from the pattern that you have in countries like Australia, in the United States and Europe, we probably could insist on people contributing, at least a large section of those who can afford it, contributing for a mandatory pension subsequently. Now the bank accounts being opened, monies being put into these bank accounts, the facility of insurances being made available to them, and what do we then do with this large body of people? Many of those who can't get a job either in the government or in the private sector. So the next limb of this financial inclusion, which I started last year, was this is an unfunded section of society. And therefore, you have to encourage them to set up businesses and small establishments on their own. So we started what is called the mudra scheme of the government, wherein all the banks were advised to give to them microfinance at the bank rates of interest. Otherwise, these people were entirely dependent on money lenders who were lending to them at 25, 30 and 35% a year. And this was very exploitative. So this mudra scheme has turned out to be a runaway success. And in this mudra scheme, in the first year, the banks were asked as a priority to earmark a certain amount of their lending and lend small loans up to 50,000 rupees, up to 2 lakh rupees, 5 lakh rupees, 10 lakh rupees on a maximum, to this section of people. So somebody would start a lady in a slum, would start a beauty parlor, or somebody would start a boutique, or somebody would become a vegetable vendor, and people started setting up small businesses. So in the very first year, we've been able to support more than about 21, 22 million people already. As the year expires today, I'll probably in the next few days have the final figures for this year. I've rolled over the scheme by increasing the amount by another 50%. So the banks have been this year given, coming here given a larger challenge, and you will have several crore people who get now financed from the bank at the bank rates of interest. Each one of them is given a credit card. They go to the ATM machines. Within that credit limit that they have, they take the money out, and each one of these small entrepreneurs tries to deposit because these ATM machines are open 24 hours a day, to deposit it before 12 midnight so that they can save even on one day's interest. And this has become a massive program of financial inclusion. So from bank accounts to state support, to insurances, to nudging them to go in for pension programs, to now making funds available to them to the banking system. And it's quite heartening to note that in this sector, like in most microfinance schemes, which the banks do themselves or through various microfinance agencies, the bad debt is almost negligible. So these are people who want to actually do business and set up small enterprises and who've been doing these businesses. What are we doing with these savings that we are making out of these subsidy programs? So this year I've announced three schemes. One is entirely state supported. That this entire benefit we got from the cooking backs gas subsidy, we've now planned that 50 million families in India, that five crore families in India. In the name of the female head of that family, the government would gift them with cooking gas connections. They otherwise use the conventional chulas. And medical studies have shown that a conventional chula can do as much damage to the lady who cooks her health as in a single day as much as 400 cigarettes can do. And therefore these women now from the savings are being brought into the system and they are being nudged and incentivized that the first connection with them will be free gifted by the state. We pick up the lowest five crore families in India which is 20% of India at the bottom belly. And each one has been given. So this saving which we have been able to make by keeping the wealthier people out and excluding the duplicate connections has gone into them. The second area, for the Indian farmer, we've now come out with a very low cost insurance scheme. Crop insurance because if the crop fails, you'll hear stories of Indian farmers being pushed to suicide because they are not able to return the loans. So that he can get back his investment and a little return on that even if there is a crop failure. So he'll pay 25% of the premium is to be paid by the farmer, 25% by the state government, 50% by the central government. And therefore any farmer who wants his agricultural crop to be insured has the benefit of that insurance. And the third part of this financial, this monies that we have saved which we have used for this purpose is a health scheme which I have announced which is in two parts. One third of India's population, the lowest one third, will all get at state expense a health insurance which covers hospital charges up to a certain limit of one lakh rupees. Anybody who's a senior citizen in that category will get an additional cover of about 30,000 rupees. And this is an annual insurance policy that they get. And therefore a crop insurance, a health insurance, a crop insurance subsidized partly by the, substantially by the state, a health insurance subsidized entirely by the state and to the weaker sections, a cooking gas facility given in the first instance entirely by the state. Now this is the area in which we've been taking India's financial inclusion. The net object of this exercise has been that wherever you grow faster, the state gets more revenue, the state is enriched and therefore you make your systems in order that in addition to the natural advantage of jobs being created and so on, you are able to use this additional resource to pump up into the areas which need to be supported. The last scheme which as I go back to India which we are launching in the coming week is something called Stand Up India. And Stand Up India addresses two sections of Indian society and that's the last point I have to make. It addresses the schedule cast and the schedule tribe which is the socially disadvantaged groups and it addresses women. So every bank branch in India, public or private, has been requested to support one entrepreneur from the schedule cast schedule tribes category and one from the women entrepreneur. They will give them a loan up to one crore rupees and create in the first instance about 250,000 new entrepreneurs coming from these sections which have not actually seen too many entrepreneurs coming up. That's a scheme we intend to launch as a part of this support to the social sector and the financial inclusion schemes that we have. Hopefully in years to come as governments earn more resources, I think the benefit of resource reaching these sectors itself will continue to increase. That's all I have to say and thank you very much. On behalf of all of us, I would just like to say a very warm thank you to the minister for that incredibly insightful and broad ranging talk. In particular, I was interested to learn about the very innovative mechanisms for financial inclusion that your government has been implementing in India. We now have 10 minutes roughly for questions, if that is all right, questions, yes, from the floor. So if you could just raise your hands and minister, you might like to come. Oh, you've got the microphone there. Okay, we've got a question right here this gentleman. Thank you. It's always been a pleasure, a finance minister to listen to you and today was no different. My name is Vibhor, I'm a master's student at ANU. So the World Bank says that for economic development, judicial, strong judiciary is necessary. But you look at the Indian judicial system, it's overburdened, chronic and you have around 40 million cases pending and the situation is so bad that for occupying land, the notion is that you first do construction, then litigation. So you have an experience as a Supreme Court advocate, you have experienced this firsthand. So is the Indian government working with all the concerned parties to bring the notion of judicial inclusion or judicial security? The second question, the second question, the NDA government came on. Sorry, could we just hold them one at a time? This is a short one. Oh, okay. So the NDA government came on the plan that they will have minimum government interference in business. Now we have the latest case of Mousanto GM Forbes in which the government has intervened to regulate the tariffs and Mousanto is now saying that they would like to leave India. So a better dispute resolution mechanism would have prevented that. Do you think that? Thank you. As far as the first part of your question is concerned, I don't think anybody can ever accuse Indian judiciary of not being powerful enough. In fact, I've always believed that one of the basic tenets of our constitutional system is the separation of powers. And ordinarily in separation of power in several countries in the world, particularly those which have powerful governments and some governments that totalitarian instincts, governments want to, the executive to encroach on the judicial space. Fortunately for us, we have a very powerful and strong judiciary which at times encroaches into the executive space. So it's the other way around. But you are absolutely right when you speak in terms of volumes of cases. It's a matter of concern. And frankly here, the courts have to streamline their systems also. Some infrastructure additions have to be done. We do give funds for it. For instance, one of my greatest regrets is when I was a law minister, I amended the procedural laws of India, which is called the Code of Civil Procedure. And I prescribed time limits for every step that a case must take so that a case doesn't last beyond one year. The time limits which parliament prescribed by law, the Supreme Court held it to be directly and not mandatory. So they could continue with the case till the courts came home. I think there was a need to mandatorily stick to those guidelines. And conscious of this fact and its adverse impact on the investment environment, there are three or four steps to continue. For instance, commercial arbitrations. Ordinarily courts don't interfere. But in India, the judiciary being powerful, the courts started interfering. So we amended the law. I've now provided for a quick, fast-track arbitration. We've created commercial benches in every high court in the country. We are now trying to put in place an organization for resolution of contractual disputes itself. And therefore, there are, with regard to the commercial investment environment, a lot of steps which have been taken are hard in the process. But as far as your second part is concerned, it's not fair for me to comment on the merits of that case because I think the order that the agriculture ministry passed is in challenge before some high court. Let the courts themselves decide. What I understand, I can theoretically say, ordinarily markets decide these matters. Price fixation is now in a liberalized economy decided by the markets. But world over, even in the most market-centric economies, antitrust action is not unknown. Therefore, if markets throw up an exploitative situation, who intervenes? I think the case that you are referring to, these fundamental principles will have to be kept in mind. Question right here, gentlemen, blue shirt. Thank you, Mr. Jaitley, for taking the time out to speak here. My name's Karan and I'm one of the new students here. You talked a lot about the schemes that the government's implementing and especially in the terms of financial inclusion and including groups which haven't been part of the formal economy as such. Now, in the past, government schemes in India have had a history of at least some sort of license, to some extent, of not being efficient and of having some sort of wastage and especially schemes like the guaranteed work scheme passed by the previous government and things like that. So what measures and mechanisms are, is the government planning to take in place, put in place? I was myself a critic of some of those schemes. And therefore, learning from the criticism which we ourselves have made, I indicated two things. One, we've linked it with asset creation. And a lot of work being done under the employment guarantee scheme is now linked to asset creation. The second, the inefficiency came from the very manner in which the system was designed. And therefore, with this jam-tunity, the Janadan, the Adha, the mobile platform now being available, we are not very far off from a situation where all monies would be transferred to the beneficiaries directly from the capital of the central government to the concerned employees itself. And this whole impression that instead of 100 days people were 10 and 29 days or 39 days, I think once this system is put in order, I'll keep my fingers crossed that the scheme will have to be reassessed. Thank you. Question, a lady in the front here. Namaste, Mr. Jackie. Thank you very much for your wonderful speech. My work in Australia is related to agriculture and food policy. And your media coverage in Canberra Times today mentioned about 100% FDI in agriculture and food processing, and also investment of superannuation into these sectors in India. Would you be able to expand on this, please? You see, agricultural produce, the popular belief is, and that's what studies have shown, almost 25% of it gets wasted. There is no adequate storage facility, there are no cold chains, there is no processing facility. And every time in the past, we gave in sentence for cold chains, et cetera, it didn't work because there was inadequate electricity. And therefore, there's no point having setting up a cold chain in a rural area where you get electricity only eight hours a day because cold chains will work on energy. Fortunately, we've now reached a stage where we have surplus power. And at least no state can complain in terms of inadequate power availability. So that currently being crossed, while preparing this year's budget, one of the important policy announcements I made was that whatever agricultural produce takes place in India, only 4% of it is processed. And this 4% includes 35% of milk which is processed. So then you average it 4%. And therefore the wastage is huge. And this is one sector in which I'm afraid we haven't been able to even develop great domestic competence. We need both capital. We also need people who are experienced players. And this is a sector which can become highly successful. We have surplus of food products. Your targeted market in India itself is probably the biggest market in the world. So if you produce in India, and even if it's meant only for domestic consumers of India, you are targeting 1.2 billion population. You are targeting almost 1.6 of the global population by setting up plants in India. And therefore this is one sector which is bound to grow. And we've given a considerable amount of thought and allowed 100% FDI. So anybody can come and set up. He has to buy the agricultural product from the Indian market. He'll of course have to invest something in the backend infrastructure. And it's that objective that we had in mind. Question, the lady in the, actually the lady in the middle here has probably been waiting longest. Yes. Thank you for your talk, minister. I was just wondering, you talked a lot about the transfer implications of the biometric card. But you didn't say anything about the transfer implications. Are you... Will you just slowly? You said a lot about... Turn the mic closer. You talked a lot about the transfer implications of the biometric card where you can transfer money, obviously to people who aren't, who need it. But what about the implications for increasing your indirect tax base through use of the cards to monitor tax avoidance? Well, you were probably at some stages not very far off. This could happen. And we'll take your question as well, because you, yeah. Just in there. No, no, I was talking about that, but that's all right. Thank you so much for giving me the opportunity. And at the same time, I just want to say that thank you so much for a very comprehensive talk that you've provided today. I had lots of questions while you were talking and every time you were actually addressing. So I thought, okay, this has been answered. And your reference to some of the gas connections and telephone and quite a few of us can relate to that. I have a very quick question. You talked about a lot of things. And one of the things you mentioned was providing health insurance for the lower socioeconomic strata of the society. What I wanted to say is healthcare has become extremely expensive in India for anyone, not just the lower socioeconomic class. So at the time while we are providing this health insurance, and it's a good scheme, what is the government doing something about actually investing in government hospitals at the same time where a lot of these people go for their healthcare needs? You see, let me first of all, by Indian standards, private sector healthcare is costly. Certain categories of treatments are costly. But if you've compared it with global costs, I think one of the areas where India seems to have done quite well, particularly in the last two decades, you have around almost all urban centers, not only the big cities, but even the two-tier and the three-tier cities, a set of globally competitive hospital chains have come up. And compared to global standards, Indian hospitals are reasonably more affordable. I can get into the details, but this is not an opportunity for that. Of course, there is still a very large section of Indian population, which finds those rates, which by global standards is affordable, but by the standards of Indian population, is probably still unaffordable for them. Now, it is that section your question really is intended. So we have a set of hospitals run by the state government, the central government, et cetera. The idea is to expand the public healthcare system. That's one step. And in the last two years, I concentrated on a lot of government investment in building institutions like the All India Institute of Medical Sciences across the country. Now we have several institutions which are in progress. The problem still is getting the faculty and the doctors there. Their problem is of footfalls. For instance, you'll have a hospital like All India Institute of Medical Sciences where about 50,000 P patients will come every day. And therefore the medical fraternity itself is under a lot of pressure. So you need the volumes to grow. Additionally, what this insurance scheme has done is for a certain category of ailments which require hospitalization. It provides a free support to the one third bottom of the Indian society. So all you have is you have an insurance card and up to the amount that card permits you can walk into any hospital and get yourself a permit. So this card will enable people to get even treated in private hospitals and which will eventually claim insurance, money from the insurance companies. Thank you very much. Now sadly, that actually brings to an end our available time for Q&A. But I think that the very thorny issue of providing healthcare for entire populations in Australia, the Australian context, it's an aging population. Obviously within the Indian context it's providing it across the nation to all. But it's an appropriate place to end. I would like to thank you all for your very interesting questions. And I would like to thank the minister for answering all of those questions so fully. But I would now, it is my great pleasure to invite Professor Raghbendra Dhar, the head of the Aunt Corden Department of Economics and Executive Director Australia of the South Asia Research Centre, to propose a vote of thanks on behalf of all of us. Please come to the table. Ladies and gentlemen, can we have one more round of applause for the inimitable Mr. Dharthi? Unlike him, I'll have to read my speech. Thank you all very much for coming to the 2016 Narayanan Oration, the 18th in the series. This lecture as in the past will be printed along with the president's message and will be available from ASARC. It will be mailed out to all the previous Narayanan Orators and to Mr. Jaitley's office and will be widely circulated among the policy community here and in Delhi. So at this time it is my pleasant duty to bring this oration to a close by thanking the people and organizations who have contributed to making this year's oration such a success. This oration is named after the now deceased Dr. K. R. Narayanan, former president of India. Dr. Narayanan inaugurated ASARC in 1994 and continued his support to ASARC throughout. Our Chancellor, Gareth Evans, who introduced our speaker today was also present at that launch. Following from President Narayanan, President APJ Abdul Kalam, President Srimati Pratibha Patil and current President Pranab Mukherjee have all continued their support for the oration series and their association with the ANU. We are lucky to have in the audience both the Indian High Commissioner in Australia, his excellency Mr. Narendra Deep Suri and the Australian High Commissioner to India. Her excellency Ms. Harinder Sidhu and also senior public servants from the Commonwealth Government of Australia, the Indian High Commission, as well as a number of distinguished guests from India, the Australia India Council and the ANU including the Pro-Vice Chancellor Professor Shirley Leach. Our heartfelt thanks to our speaker today, Honorable Minister Runejitli. To be the finance minister of India, the country with the third largest economy in purchasing power terms and the highest growth rate among large countries and whose economy is replete with both opportunities and challenges may be daunting. However, Mr. Jaitley is arguably one of the finest finance ministers India has ever had. And this is saying a lot. You saw some evidence of that in his speech but believe me, there's a lot more. There's a lot, lot more which he has not said about how much he has done for the country and for the global economy. And this is saying quite a lot because India has had many outstanding finance ministers. During the time that Mr. Jaitley has been finance minister under the stewardship of Prime Minister Narinder Modi, India's rankings have improved significantly in several key areas indicators including transparency international corruption index, the ease of doing business index, FDI inflows, credit ratings and several others. You name them. Just the government has not even completed two years in office. A few weeks ago, he presented the budget of the government of India for 2016-17. It is a remarkable policy document with the finance minister combining fiscal prudence, policy certainty and direction and much needed support to India's vast agricultural sector which has been adversely affected by two years of subnormal rains, falling investment and rising current subsidies. Furthermore, Mr. Jaitley's budget combined his acumen for financial planning and policy clarity with strong supportive measures for the less well-off sections of India society. Economist talks of reforms with the human face. A fine example of this is the Indian government's recently announced budget. Many of you would know that prior to his joining politics, Mr. Jaitley had a brilliant career as a senior advocate in the Supreme Court of India. He served with distinction in a ministerial role in various governments and as one of the most principal politicians in India, no matter whether he was in opposition or in government. I do not have adequate words to thank you, Mr. Jaitley. It is truly an honor to have you with us. We wish you all the very best in all spheres of life. ASARC's list of Narayanan speakers reads like a who's who of important Indian public figures and Mr. Jaitley is a stellar addition to this list. The Narayanan oration now ranks among the very best India lecture series anywhere in the world. I would request Mr. Jaitley to stay in touch with ASARC and examine and guide our research. I express my sincere gratitude to the Australia India Council for financially supporting this year's lecture as it has in the past. At DFAT, Jacqueline Ashworth, Peter Trussford, Pete Timblotonikov, and the office of the Australian High Commissioner in Delhi provided invaluable logistical support for organizing this oration. At the Indian High Commission, the High Commissioner, Mr. Suri, and his staff, particularly Mr. Sonal Bajaj, provided critical support throughout. At the ANU, my home, the media office, particularly Penny Cox, Katherine Pierce, and Sandy Hawks were key organizers of this event. In my own department, the Uncordained Department of Economics, our administrators, Hyokyung, and Sandra Zek, and students, I don't know what we would do without them, but many students who have helped out with this oration, I would like to thank all of them for their tireless and selfless effort. Thank you all very much.