Manmohan Singh, finance minister, never really graduated to become a reformist prime minister. This handicap is stalling India's growth. Sumit Mitra writes.india Updated: Oct 11, 2011 01:42 IST
Twenty years is long enough for even a hyperactive man to start wearing thick bifocals, forget for a moment the name of his secretary, or look embarrassingly cheerful on solemn occasions. Prime Minister Manmohan Singh, though, seems to have undergone an identity shift that is quite puzzling. Nobody suspects that - between 1991 and now - he has forgotten his economics. Yet there is something badly amiss in his personality. As finance minister in the Cabinet of the late PV Narasimha Rao, he dismantled controls, broke monopolies and embraced globalisation - all in a short span - and seemed unstoppable, driven by a religious zeal.
But all that is water under the bridge. Singh has lost not only his 1991 spirit. His senior-most ministers fight like querulous schoolchildren while he looks on. When his 'boss', UPA chairperson Sonia Gandhi, went on a long and private foreign tour, it was not Singh, the prime minister, but another minister under him who was put on the list of 'night watchmen.' There is no unanimity in the government on policy issues. The noises that are heard in Raisina Hill are so contradictory that they do not give the healthy impression of diversity of opinion. Rather, it shows the anarchy that prevails when the nominal leader is bereft of any authority. Sadly, Singh does not seem to retain a sense of purpose any more, and is on a drift.
The change in him was evident from 2004, when it became clear that although he had come back to government with a designation loftier than before, he was, in fact, a stuffed bandh-gala invited to fill a chair. The oligarchy running the government had ideas of policymaking that were totally inconsistent with Singh's hard-headed approach to economic growth and reform. For instance, it is difficult to assume that he spontaneously nodded on the Mahatma Gandhi National Rural Employment Guarantee Act, a brainchild of the National Advisory Council (NAC) headed by Sonia Gandhi, despite its inflationary potential, and the fact that the so-called asset it creates would undergo no audit except a symbolic'social audit' by village councils. It's a corruption factory, a note-for-vote scheme, and unfortunately Singh "did not bark".
He also kept quiet when, in 2008, Rs 60,000 crore was squandered in the name of loan waiver for farmers, the trigger being large-scale suicides by cotton-growers in the Vidarbha region of Maharashtra. As a former governor of the Reserve Bank of India (RBI), Singh would have known better than the NAC bleeding hearts that farmers entitled to borrow from banks are seldom driven to suicide. Those who walk across the precipice are not banks' customers; they are generally victims of a moneylender-politician-police nexus. Expectedly, the loan waiver bonanza had no impact on farmer suicides. In 2006, according to the National Crime Records Bureau, there were 17,060 such incidents in the country. In 2009, the number rose to 17,368.
It is not clear if the populist policies of UPA 1 were driven by a welfare doctrine or an intention to trade off taxpayers' money for the incumbent to hold on to power. But that's when Manmohan Singh seemed getting wedded to a vow of omerta, the code of silence of the Italian mafia. He became quieter after UPA 2, when cash-for-vote became the government's guiding creed, in total disregard of an economy buffeted by corruption and a lack of will to reform. Singh's writ seemed limited over his conceited finance minister Pranab Mukherjee, who is habitually long on promises. Against an expected tax revenue growth of 17% this year, the direct tax, which grows better than indirect tax, went up only 6.7% as on September 15 last. After getting approval for an expenditure outlay of Rs 412,817 crore in the budget, he is now borrowing another Rs 52,872 crore. Meanwhile, all his projections of GDP growth, inflation and subsidies are forgotten. It is certainly not the code of conduct Singh would himself have followed when he was finance minister. But he hasn't got the courage to say so.
Against the backdrop of an economy on teeter-board, the NAC has again obtained Manmohan Singh's silence to a hugely expensive Food Security Bill that will cover 75% of the rural population and 50% of the urban population. Covering 800 million people, it is destined to win the medal as the world's biggest social security scheme. However, apart from the cost of procuring the extra grains, the funds needed for infrastructure like godowns and transport facilities are mind-boggling. There is no provision for it in the budget. With a stock of 60 to 70 million tonnes of foodgrains being necessary round the year, there will be no marketable surplus left in the country. The other alternative, import, is extremely dicey. The global food market is going relentlessly northward. Just a whiff that India may soon be buying-and the international prices will hit the roof.
Despite Mukherjee's attempts to talk up the market, the world has begun to feel that India, after a great promise, is beginning to lose out the race. Gone is the hyphen between India and China. Foreign capital is fleeing the Indian capital market like on a fire alert. But Singh is unfazed. Never a team leader but a good second-in-command, especially when the commander is on leave (as Narasimha Rao nearly was) - when Sonia Gandhi's famous "inner voice" prevented her from being the PM herself, Singh gladly accepted this travesty of the Constitution, thinking he'd be the horse and coachman both, pulling the coach and pocketing the tip. Probably he didn't expect that the fate of the horse is only to suffer the spur of the rider squatting on the saddle.
Sumit Mitra is a Kolkata-based political commentator. The views expressed by the author are personal.