Editor's Note:
This is an edited transcript of the interview.

Yashwant Sinha stepped into some large shoes when he first became India's Finance Minister.

And his first budget attracted a barrage of criticism.

Compelling Mr Sinha to roll back several budget proposals, and earning him the Rollback Sinha sobriquet.

But today few recall these episodes.

The former Indian Administrative Service officer from Bihar is said to be today a more confident and adept politician.

And his fourth and latest Budget has been widely hailed.

Shankar: Mr Yashwant Sinhar, welcome to In Conversation. Well, you've come a long way since you earned the sobriquet, "Roll-Back Sinha", with a revolutionary budget proposal now, haven't you?

Yashwant: Well, I wished the media had recognised my talent even then when they called me 'Roll Back Sinha'. I haven't changed but the perception has changed.

Shankar: And certainly you are the author now of the second generation of reforms as they say.

Yashwant: Well, I think the government of the Vajpayee is the real author. I'm the pointman, who is carrying forward the programme.

Shankar: But when you first came in, it was difficult sort of filling in the shoes of ministers who were before you like Mr Manmohan Singh or P.Chidambaram. But you've now grown into your own. Do you feel that?

Yaswant: Well, I never suffered from what might be called a 'complex'. I was aware of the fact that I had very distinguished predecessors. But I was always confident that I should be able to fit the bill.

Shankar: Well, considered you've had tremendous experiences as a bureaucrat before this and also your vast experience otherwise in government. You've also been Finance Minister before this term. You've the one who started out the idea of a fiscal deficit which Mr Manmohan Singh then later on used in his budgets. So surely you have the experiences no doubt, but how much do you think you will be able to deliver now?

Yaswant: I think we will be able to deliver fully and completely, there should be no doubt as far as that point is concerned. The problem at the beginning was that you know I came as part of a government which was not being perceived rightly. For instance I notice in the media here in Singapore that the BJP is still described as a Hindu Nationalist Party and the Prime Minister is a Hindu Prime Minister, which is a problem with perception because it is very far removed from reality. And I remember immediately after I assumed charge of the post of the Finance Minister, I had gone to the US to attend a meeting of the Fund and the Bank and I was meeting with investors because some friends felt that as representative of the new government, I should have a meeting. I told them you know you can see that one is quite normal, I haven't come out from some dark cave, but you know again as I've said the perception are often far away from reality and I am glad that the perception has undergone dramatic change in the last three years.

Shankar: Well, what about the issues that you've raised in the budget? How are you going to get foreign direct investment, to the level that you want?

Yaswant: We have been liberalising the foreign investment regime in India over the last many years and particularly in the last three years that we have been in the office. And you must have noticed that last week for instance the government of India has taken some momentus decisions to make the foreign investment regime far more liberal then it was so far we have removed sectoral caps in many areas. We have now permitting 100 percent foreign investments. We have also removed the procedure bottlenecks by making them automatic so that they don't really have to run from one office of the government to another to get approvals. These are very, very significant changes that we have brought about and I'm here in Singapore for instance to convey this message to investors here that things in India are changing, have changed and that India is far more attractive in destination than it used to be. And on this issue let me also supplement by saying that in India are the strengths have known you know apart from being a large continent country we have system which operates, we have a judicial systems which is dependable.

Shankar: Is it I mean that is one problem of the image of India isn't it? That the political systems often runs into a crisis, the judicial system quite often run into a crisis.

Yaswant: The judicial system does not run into a crisis, the administrative system does not run into a crisis. What the world will perceive as a political crisis or the political system running into a crisis, my point is that in a democracy, and especially in a parliamentary form of democracy, these things are usual happenings. And therefore we should not read too much meanings in this.

Shankar: But wouldn't that affect anyone considering coming into India for investment?

Yaswant: Why should it? Why should it? Let me make the point to you that we've had in the decade of nineties, when we started on the reform programmes, we've had three governments, in fact four governments led by 4 different Prime Ministers and we've had economic reforms right through. Every political party in India has been either a direct participant or a supporter of these four governments and they have been partners in these reforms programmes. Today, almost all major political parties are either in government at the centre or are in the governance in the states and in the states they are carrying with the reform programmes. So if it is a question of national consensus economic reforms, I would say the national consensus exists irrespective of noises to the contrary from time to time.

Shankar: What is the status on cases such as VSNL - Videsh Sanchar Nigam Ltd and Maruti- all your privatisation plans for ...

Yaswant: They're on course, they're on course. The government has taken policy decision to disinvest and privatise some 27 public sector units including the two that you've mentioned just now and the process of dis-investment is on. And we have a timetable and I'm quite sure that we will be able to stick to that timetable, and we will be able to do it.

Shankar: Well, you've sort of targeted about 5 fold more than what has been previously achieved with this investment that seems to be a huge figure. Considering problems that you have come across now, is it realistic that you will be able to see that through with your ten years as finance minister?

Yaswant: I'm confident, this year I am far more confident than I have been in earlier years for the simple reason that as I have mentioned to you we have a large number of cases which are already in the pipeline and we have the procedures very clearly defined and laid down and we have already made progress with regard to many of these undertakings.

Shankar: How are you dealing with competition from let's say from countries like China which is in a better position than where India is in terms of foreign direct investment and what are you doing in terms of also imports coming in from China into India. How much does it affect you?

Yaswant: In certain areas of consumer goods and some other manufactured goods, imports from China have certainly increased, but let's remember one basic figure. In the year 2000, our imports from China increased by about 30% our exports to China have increased by 60%. So many people in India tend to look at only one side that Chinese imports into India are surging and when you go into major cities like Delhi or Mumbai, you see Chinese goods on the shelf, that gives the impression as if we are inundated in fact imports overall have declined and while there is imports from China in certain areas. I don't think it is a matter of great concern. Because we have been telling the Indian industry, we have been enabling the Indian industry, we have been helping the Indian industry to become more competitive and I am confident that the Indian industry will be able to compete with China in terms of goods. The have been competing with them in export markets.