Before he became the Finance Minister in 1991, Dr Manmohan Singh was the Secretary-General of the Geneva-headquartered South Commission, where his salary was in US dollars. When he devalued the Indian rupee in July 1991, the rupee value of his dollar savings swelled. Not wanting to profit personally from an official decision, Singh deposited the ‘windfall gains’ into the Prime Minister’s Relief Fund.
Former Union Minister Jairam Ramesh offers this as an example of Manmohan Singh’s “unimpeachable integrity” in his book, To the brink and back which gives a diary-entry view of what happened during the epochal days of 1991. Ramesh, then an adviser to Prime Minister Narasimha Rao, had a “sherpa’s role” in the formation of economic policy, which offered him a full, ring-side perspective of the happenings.
To the brink and back shows how craftily the Rao-Singh duo worked to get path-breaking economic policies through, without which India would have collapsed — like, Ramesh points out, Greece today. Borrowing from philosopher Isaiah Berlin, Ramesh likens Rao to the all-knowing fox, and Singh to the hedgehog, which knows only one thing but very well. Neither could have pulled it off without the other.
Indeed, the book might just as well be profiles of the duo, for (whether by design of chance) the characters of Narasimha Rao and Manmohan Singh shine through. Ramesh is more explicit on this about his boss Narasimha Rao, dedicating a full chapter to him at the end of the book, where he describes how complex a personality Rao was. However, Manmohan Singh’s personality oozes through anecdotes, such as the deposit of ‘windfall’ gains into the PM's Relief Fund.
The book starts with a description of how bad the economy was when Narasimha Rao assumed office in the aftermath of Rajiv Gandhi’s assassination. The economic crisis is always remembered as a foreign exchange crisis, when India had less than a billion dollars of foreign currency, barely enough to pay for two weeks of imports. The foreign exchange predicament was caused by the Gulf War (which made oil prices shoot up), political instability in India (thanks to, says Ramesh, the violent agitations against the implementation of the Mandal Commission’s recommendations) and the effect of India’s short-term borrowings earlier, which could not be rolled over. However, it was more than a foreign exchange shortage problem — it was a full-blown economic crisis with inflation at 10.3 per cent in March 1991 and 16.7 per cent in August 1991. To Narasimha Rao, the situation needed professional help.
Ramesh takes the reader through Manmohan Singh’s appointment through the memoirs of (former bureaucrat) P C Alexander, who suggested Singh’s name to Rao. (Singh, according to Alexander, was jetlagged from an overseas tour and fast asleep and had to be woken up to be told he would be the Finance Minister.)
Contrary to the general view, says Ramesh, Manmohan Singh was not a left-leaning economist, who shifted his convictions to reforms when he got the job. Ramesh cites a number of speeches made by Singh well before he became the Finance Minister which reveal a reformist mindset. “Clearly, the man who would become the finance minister in June 1991, was no prisoner of dogma and certainly no ideologue!” says the author.
From then begins the Rao-Singh ‘jugalbandi’. Ramesh describes how Manmohan Singh stood steadfastly against India defaulting on loan repayments to IMF, though it was even considered by Rao himself at the behest of people including economist I G Patel and many MPs. In the end, Rao allowed the professional to have his way.
Measures such as the (two-stage) devaluation of the rupee, pledging of gold to raise loans, dismantling of the ‘licence raj’ were all the result of deft political management, not just by Rao, but also by Singh. The book has an interesting account of how Manmohan Singh moved the then Minister of State for Industry, Rangarajan Kumaramangalam, to acquiesce to the new industrial policy, by giving Ranga an emotional talk recalling his (Singh’s) close association with Mohan Kumaramangalam, Rangarajan’s father.
Ramesh ends the book with his sudden and inexplicable exit from the Prime Minister’s Office in September 1991, which left him “seething with rage” even though he continued to enjoy a warm personal and official relationship with Rao.
Despite that disappointment, Ramesh has only praise for Rao. Calling Rao “simply magnificent”, Ramesh recalls how the Prime Minister had to simultaneously battle a number of problems, including his own health. The economy he inherited was bad, he had to stave off a leadership challenge from one of his own colleagues, Sharad Pawar, the Kashmir valley was in ferment, a senior Indian Oil Corporation’s official, K Doraiswamy, had been kidnapped, he had an “abrasive” Election Commissioner – T N Seshan – to deal with, there were “theatrical actions” in Tamil Nadu and Karnataka over the Cauvery river waters issue…and so on.
Ramesh says Rao was a much misunderstood man and that the party later did not treat him well.
“I was simply in no position to know what went wrong between him (Rao) and his own party — a party he had served with distinction for almost half a century. I was an anguished witness to a most painful event on 24 January, 1998, which showed how remarkably friendless Narasimha Rao had become within the Congress,” Ramesh says, alluding to the then Congress President, Sitaram Kesari, declaring that Rao would not be put up as a candidate in the upcoming polls.
What the book lacks is masala. It is evident that Ramesh has striven to be politically correct and non-controversial. There are no Sanjaya Baru-type of explosive statements. There are a few areas that could have been fleshed out better. For instance, the book says Pranab Mukherjee was sure he would be made the Finance Minister but it gives no view of Pranabda’s reaction when he was not. Another instance: though Ramesh observed Rao “from the closest of quarters”, there is no insight on how Sonia Gandhi and Rao treated each other. The book is also not clear on why the devaluation happened in two stages, though it tries to explain it by saying Manmohan Singh wanted to ‘test the waters’ with the first devaluation.