NEW DELHI: Two successive rounds of devaluation of the rupee on the eve of a Parliament session have left several Congress MPs embarrassed, uneasy and even more critical of their “non-political” Finance Minister than they were before. Already apprehensive about facing Parliament as a minority Government, party MPs feel that depreciation, inevitable though it may have been in the long run, could have been delayed or at any rate should not have been carried out in two successive doses.
While several MPs privately expressed their unhappiness over the move, two were forthright enough to go on record with their reservations, namely the irrepressible member of the Rajya Sabha “shouting brigade” Ratnakar Pandey, and P.M. Sayeed, a longtime MP who has been returned to the Lok Sabha this time as well.
When asked for his reaction, Pandey prefaced his answer with a few general critical remarks against the Finance Minister, Dr Manmohan Singh. “He is a scholar, a negotiator on economic issues but not a politician. He should have been made an adviser and not a minister. He was foolish to reject our party manifesto”.
On rupee devaluation, Pandey said that while the economic crisis that had necessitated devaluation was not the present Government’s fault but inherited from its predecessor. It should not been done in such a hurry. He felt that the Government should have held wide consultations with bankers, economists and heads of financial ‘institutions before taking such a step. “I think they should even have taken Parliament into confidence,” he said.
Sayeed said while devaluation was inevitable, “the way in which it has been handled by the Finance Minister is rather surprising’. He strongly felt that devaluation should have been carried out in a “single stroke” and not in two installments.
Sayeed said, “Some embarrassment has been created by the Finance Minister by devaluing the rupee twice in three days, as if to say that the first dose was not enough. It creates an impression, right or wrong, that the second dose was given at the instigation of some organization which was not satisfied with the first one. Such allegations have been thrown by the opposition had the Finance Minister been a politician he would have avoided giving such an impression”.
While Sayeed had no quarrel with the timing of the move, saying that he balance of payments crisis had left no option but to go in for it, other MPs felt that it should not have been carried out on the eve of the Parliament session. “It has embarrassed all of us,” said a minister, off the record, He took the line that devaluation could have been carried out well after the budget had been presented. Alternatively, he felt that the Government would have been much better off throwing open the currency, making it freely convertible. The damage, he felt, would have been about the same, but without the implications of the Government move.
Another minister, while defending the move admitted that it had made the going tough for the party in Parliament, laying it open to charges of being “sold out”.
Article extracted from this publication >> July 19, 1991
