At first glance it might seem astonishing that the one minister in the P.V. Narasimha Rao government who can truthfully claim that he did not expect to be there, is the man with the most difficult job m the cabinet. India is looking economic disaster in the face and the Finance Minister has the twin —and often conflicting — responsibilities of averting the disaster without forsaking development, or the poor. It is not a job anyone in his right mind could relish since it involves taking the kind of decisions that spell political harakiri (and are consequently never taken): hard, non-populist measures which are going to Pinch everyone very pain- fully indeed. So today, the soft-spoken and mild-mannered Dr. Manmohan Singh seems to be rushing in where politicians fear to tread.
Depending on the point of view, the appointment of the internationally well- known and highly respected economist to the job most fraught with pitfalls has been acclaimed and reviled. Congressmen, by and large, have favored the latter: not only has Dr. Singh stolen the limelight both at home and abroad but several senior members rather fancied the job them- selves, its perils notwithstanding. Pranab Mukherjee, now Deputy Chairman of the Planning Commission a job that Singh once held), for one, considered Finance his own. Thus, to ignore the claims of political heavy- weights in favor of an academic bureaucrat with absolutely no political wherewithal or tender thoughts for the party’s constituency seemed not only a rebuff but also a mistake.
For instance, Dr. Singh’s admission that it was possible to return the prices of most commodities to last year’s levels — one of the first promises in the Congress manifesto’s time
Table — has caused the party acute embarrassment and anger. While the Finance Minister is being fulsomely praised _ for his frankness, the Congress-l has ended up with egg on its face 85 the Opposition gleefully seized the opportunity to condemn it for in votes with false promises.
Outside the party, how- ever, the 59-year-old Sikh refugee from Pakistan, has been welcomed as an inspired choice? His impeccable economic credentials his bureaucratic experience, his intimate knowledge of international monetary agencies and the people who run them, all make him one of the best qualified people for the tasks ahead.
The Prime Minister, whose inspiration it was, apparently had other considerations in mind when he rang up Singh (then Chairman of the University Grants Commission) on the morning of the swearing-in ceremony. His choice fell upon the economist for apparently two reasons: firstly, the economy’s critical, if not fatal, condition required a specialist’s touch to nurse it back to health; secondly, Dr. Singh had no strings attached something which could not be said of the politicians. His reputation was unsullied with no business interests or friends lurking in his closet. This was, in Rao’s view, a great asset: Man- mohan Singh’s decisions, hereafter, would not be accused of expediency or favoritism,
Politically, too it has several silver linings. The hard, unpalatable decisions that must now be taken are in the hands of a professional whom people tend to trust and not a politician whose motives and actions are always suspected. It also has the advantage of distancing the party, just a little, from the hardships that are to follow. And in the event of things going wrong, well, you can al- ways blame it on the out- sider.
Moreover, Dr. Singh is a professional who is universally well-regarded. Nothing in his career so far has been frowned upon. Born at Gah, in Jhelum district of what is now Pakistan, Singh was educated both at Punjab University and then at Cambridge and Oxford. His potential was evident even then: he won Cam- Bridge’s prestigious Adam Smith prize in 1956. The following year he returned to India as a university lecturer. For nine years he remained at Punjab University before posting out for international duty with UNCTAD “between” 1966-69. He then joined the Delhi School of Economics as a professor.
Two years later, his academic career was cut short and in the decade that followed he would hold almost every major economic post at the Centre; Economic Adviser to the Ministry of Finance. (72-76); Secretary Finance (76-80); Planning Commission as Member- Secretary (1980) Governor of the Reserve Bank of India (1982) and finally Deputy Chairman of the Planning Commission.
In all these positions those who have worked with him have nothing but admiration for his talent and his conduct. Hardworking, meticulous, unfailingly polite and charming “such a nice man” who knew his business thoroughly Eminent is his middle name.
Rajiv Gandhi begged to differ: the former PM referred to the members of the Planning Commission under Dr. Singh as a “bunch of jokers.” Perhaps he had been annoyed by Singh’s reported comment that while ten per cent of India would be entering the 2ist century the other 90 per cent would be returning to the 19th.
The two comments by the two men would seem to indicate that Singh had reservations concerning Rajiv Gandhi’s march towards modernity. Referred to as a centrist, left-of-centrist, nationalist, Singh, like most government economists, is said to be an in between man. He does not, there- fore, wish the multinationals to takeover, or to wholly privatize the public sector. The poor also figure heavily on his agenda as does a planned economy, He is not an ideologue but a consensus man (some- thing he shares with his PM) willing to shift ground; change his mind and direction if the need arises.
For example: in 1980-81 Manmohan Singh negotiated our first IMF loan with, people say, the mini- mum number of conditional ties attached. As Secretary General of the South Commission (87-90) to which he was appointed after Rajiv Gandhi’s dis- courteous reference (as compensation he was awarded the Padma Vibhushan), he warned against the deleterious and often unfair attitude of the same financial institution in its dealings with developing countries. Now as Finance Minister he is once more openly advocating an IMF loan, saying there is no option. But if there is no alternative, then what bar- gaining power will we have — and will we not be subjected to those very dangers he had outlined? The thinking however, seems to be that it is better to go now with folded hands, than later, on our hands and knees.
So far the Finance Minister, who has vowed to share everything with the political parties and the public, has been fairly forthright, if somewhat platitudinous. He has warned of the need to tighten belts for greater fiscal discipline and structural changes. He has said it will take three years before things really start looking up again — that is if we make a start now. He has spoken of the need for integration with the global economy, austerity, and relaxation of FERA regulations, liberalization and the entry of multinationals in some sectors. Reducing subsidies selectively, social justice and the need to bridge the gap between rural and urban incomes have also found mention. His immediate priorities, he claims, are the budget and the BOP crisis, the IMF loan and restoring international confidence in India.
One has to wait and see how precisely he will reconcile these different requirements. Before that how- ever, he has to reconcile the political parties and achieve some sort of consensus amongst them in support of his measures. His talents as a man of consensus apart, one of his main advantages — and no doubt one of the reasons for his appointment — is that the Left thinks quite highly of him. And whether they admit it or not, most par- ties realize the gravity of the situation.
His solid reputation with the international monetary institutions is also a plus point. He is regarded as ‘one of us’, trusted and liked — much better to deal with than a politician.
On the minus side, professor sahib, the father of three daughters who has heart problems, does not have any political standing, only the Prime Minister’s pleasure. His job will be made no easier by politicians now eager to spend money “for the people.” Will he be able to with- stand both tough IMF conditional ties and domestic political pressures as he tries to steer the economy out of the quagmire?
Article extracted from this publication >> July 19, 1991
