Singh was never king

by Utpal Kumar

By the kind courtesy of The Pioneer

This article is a bit longish but, definitely worth the read, if as true Indians we care for the welfare of this nation at heart.

  

Manmohan Singh was seen as the ‘father’ of India’s economic reforms. Eight years in office, he has all but betrayed his own baby. Utpal Kumar wonders if this man truly believes in market economy.

When Manmohan Singh was sworn in as the country’s 13th Prime Minister in May 2004, it was widely believed that he would take the Vajpayee Government’s genuinely successful reform agenda forward. Most people expected him to cut through the existing red-tapism to set free the private sector. Such expectations were not uncalled for, as Singh was perceived to be the face of India’s economic liberalisation set in motion in the early 1990s when he, as Finance Minister, scrapped industrial licensing and slashed import duties, besides making way for private players in sectors once reserved for the Government.

Eight years down the line, optimism has all but vanished. The GDP growth rate has fallen from a healthy 8.4 per cent in 2010-11 to 6.5 per cent in 2011-12. Industrial growth has declined from 8.2 per cent in 2010-11 to 2.8 per cent a year later. Export has gone down from 33 per cent in 2010-11 to 20 per cent; this despite a 27 per cent fall in the value of the rupee since July 2011, which in normal circumstances would have boosted Indian exports. Imports, in contrast, have continued to grow, widening the balance of payments (BoP) deficit to nearly four per cent of the GDP, a gap not witnessed in the past two decades.

The blame primarily rests with the Prime Minister, who in the past eight years has rarely showed his reformist face. Instead of using his position to forward the much-needed second-generation reforms, Singh is today running a Government that has become synonymous with unbridled corruption, unprecedented policy paralysis and unmatched populism. Even the sympathisers are disenchanted. Kuldip Nayar, the author of the recently-published Beyond the Lines, says: “The Manmohan Singh Government will go down in history as the most corrupt period faced by the nation.” As for reforms, the UPA’s ‘achievements’ include a job scheme that distorts labour market and breeds corruption, an education policy that threatens to institutionalise mediocrity, and a food security Bill that ridiculously seeks to cover 75 per cent of the rural population and 50 per cent of the urban at the cost of more than Rs 100,000 crore. With sluggish economy, sliding currency and fluctuating stock market, Singh has lost the mythic aura diligently crafted over the years.

This brings us to the question: Why has Singh failed to repeat his 1990s feat? Is he really a reformer he is made out to be? And, finally, is he a good man in a bad party, forced to do things against his will?

ONCE A BABU, ALWAYS A BABU

Before his stint as Finance Minister in 1991, Singh showed little promise as a reformer. He had spent much of the previous two decades supporting the very socialist edifice he later sought to pull down. In fact, Singh fits in the mould of a typical bureaucrat who lacks conviction — political, economic or ideological. So, in 1991, he pushed reforms because his boss wanted him to do so. In 2004, he sought to reverse it just because his new master had distrust for the invisible hand.

Singh has not become anti-market overnight. In fact, he never was pro-market. The roots of his perceived economic turnabout can be traced back to 2004 when the UPA rode to power on an inherently anti-reform agenda. And, one of the first things he did after becoming the Prime Minister was to dismantle the Disinvestment Ministry setup to ensure the smooth privatisation of ill public sector units.

Born on the Pakistani side of Punjab and educated in Oxford, Singh decided to leave academics to serve the Government in the early 1970s when Indira Gandhi was at the helm of affairs. A tough leader who loved the company of sycophants, Indira Gandhi was never easy to work with. But Singh saw a phenomenal rise during this period, and this tells a lot about him. Soon he became a pillar of the socialist superstructure. So much so that he has even been given the credit of coining the much-misused “garibi hatao slogan”. He was also part of the highest echelons of the Finance Ministry which devised an exorbitantly high tax regime wherein someone like JRD Tata had to sell some property annually to pay his taxes which were higher than his income!

One can gauge the level of Singh’s socialist conviction from the fact that in the mid-1980s, he was rebuked by then Prime Minister Rajiv Gandhi for pursuing regressive ‘pro-poor’ policies. One wonders why there’s so much fuss today about the “underachiever” tag among Congressmen when one of their own deities publicly referred to Singh as “joker”. Former Union Home Secretary CG Somiah writes in his autobiography, The Honest Always Stand Alone: “He (Rajiv) wanted us to plan for the construction of autobahns, airfields, speedy trains, shopping malls and entertainment centres of excellence, big housing complexes, modern hospitals and healthcare centres.”But Singh wasn’t a convert yet. “A few days later,” as Somiah writes, “the Prime Minister shared his thoughts with journalists, calling us a ‘bunch of jokers’ who were bereft of any modern ideas of development.” This hurt Singh terribly, yet he stopped short of tendering his resignation. Maybe his bureaucratic instinct stopped him: Politicians are temporary, babus are forever!

Singh was right. Soon his fortunes changed and he became the Finance Minster, though he was not the first choice of PV Narasimha Rao. (Interestingly, it was comrade Harkishan Singh Surjeet who had suggested his name.) Singh soon initiated pro-market policies wherein being rich wasn’t a stigma. Yet, to call him the ‘father’ of economic reforms is plain fabrication. The fact of the matter is that Singh, in his long bureaucratic career, was the promoter of statism. It was his regressive policies initiated in the 1980s — first as RBI Governor from 1982-85 and then as Deputy Chairman of the Planning Commission from 1985-87 — that hurried the BoP crisis.

Singh initiated the reforms in July 1991 at the behest of Rao. His next two Budgets solidified the market-friendly steps. By 1994, however, the Congress began to think about elections due in two years. Under pressure from the party, the Budgets of 1994 and 1995 became populist in nature, proving the fact that Singh was reformist only to the extent the party wanted. And, the moment he was dictated to present an ‘electoral’ Budget, he was more than willing to oblige.

Interestingly, it was Rao, not Singh, who seemed more committed to reforms. Singh remained reluctant, but the babu in him made him do what the Prime Minister told him. “Initially, Manmohan would hardly do any talking. He was unsure, hesitant and apprehensive. Most of the time, it was Rao who would take initiatives in the meetings, besides shielding him from vicious attacks from both within and outside the party. So, it’s a myth that Manmohan initiated reforms. Though done out of compulsion, if anyone who deserves credit, it is Rao,” says a former bureaucrat working with the Finance Ministry.

THE QUESTION OF DECENCY

No doubt, Singh is an honest man. His family members do not run riot as is the case with many political families. But the problem with this decent man is that he has great temperament to tolerate corruption, impropriety and highhandedness. Even his honesty is not absolute. How else can one explain the presence of House No 3989, Nandan Nagar, Ward No 51, Sarumataria? This is Singh’s house in Dispur. And on paper, he lives there — just to justify his Rajya Sabha nomination from Assam!

Yashwant Sinha, too, has a story to tell. He mentions in his book about how Singh brought a file to Chandra Shekhar, who was then the Prime Minister but had already resigned. It was regarding Singh’s appointment as UGC chief. As Chandra Shekhar had already put in his papers, he pointed out his inability to do so. Singh had a way out: He just backdated the file!

There were other occasions as well when the Prime Minister’s actions were unwarranted — like his outrageous comment on the RSS’s role in the 1984 anti-Sikh pogrom while campaigning in Delhi for the only electoral battle he fought and which he lost eventually. In the 2G spectrum, he vigorously defended Andimuthu Raja till the end. And, even in the CWG scam and ISRO-spectrum deal, he at best remained hesitant.

But then Singh has always been ambivalent on such issues. In April 1992, barely 10 months into his tenure as Finance Minister, the Harshad Mehta episode took place. The stockbroker had colluded with senior public sector bank officials to siphon funds from the banks into the stock market, which crashed when the wrongdoing was exposed. According to reports, when the news first reached the Ministry, Singh, instead of ordering a high-level inquiry, tried to downplay it, saying: “Then there will be a lot of noise. People will write about it, everyone will know.” Sadly, for him, a few weeks later, the scam became public.

Being a babu by nature, Singh distrusts anything political. This became evident last year during the Jan Lokpal campaign where he decided to rely on technocrats like Kapil Sibal and P Chidambram and embraced their hardline, legalistic approach to tackle a purely democratic movement based on people’s apprehensions regarding corruption and black money. The result was Anna Hazare’s arrest, citing some overt and not-so-overt sections of the CrPC and IPC. It’s a different matter that the move backfired, and Singh was forced to opt for political dialogue. The incident, however, shows the Prime Minister’s babu-like penchant for technocratic approach rather than democratic.

THE CRISIS AND AFTER

How does India find itself in the economic mess it is today? Only last year, the Time magazine had famously brought out the cover story on how the 21st century would be about India and China. A year later, the country has just lost the plot.

It seems, with a non-committed economist at the helm of the Government, those in the corridors of power feel the economy can operate on an autopilot mode. So, nothing has been done to revamp it. Instead, the focus has shifted to bogus welfare-ism, thanks to Sonia Gandhi’s Left-inspired ‘pro-poor’ agenda. Thus began the NREGA experiment which in the short run might have given electoral dividends to the Government, but culminated in ruining the economy — and in the end making life difficult for those very people for whom it was originally initiated.

Apart from wasting the nation’s scarce resources on unproductive works, the scheme has over the passage of time resulted in labour distortions, as rural workers of a labour-surplus State did not feel the need to migrate elsewhere to work as farm labour. Even industrial towns found it difficult to woo contract workers. Besides, the scheme is bad economics. As of March 31, 2010, the Government has released Rs 784 billion under NREGA, and if the 2010-11 budget is also included, the figure touches the Rs 1.185 trillion mark, making it the world’s largest social welfare scheme. But has it achieved the goal of poverty alleviation? Until 2004, India had 456 million people living below the international poverty line. In 2010, four years after the launch of NREGA, the number of poor increased to 488 million!

So, the Prime Minister has come a full circle. He began his political career with the garibi hatao slogan. He, in all likelihood, would signoff with the same discredited agenda. He may soon be forgotten as a failed leader who once inspired the whole nation. But it would be hard to forgive him — for the dreams he first ushered and then disdainfully shattered among millions of poor, middle class Indians to uplift them from the vice-like grip of socialistic pretensions, for India’s lost years when the country could have made a difference globally. The scar will remain for quite some time.

The views expressed by the author are his own and left to public to judge and rationalise for themselves.