B S Raghavan

PM takes charge of Finance — and how!

B.S.RAGHAVAN | Updated on March 12, 2018

Dr Manmohan Singh

What a stunning difference taking over Finance Ministry has made to the persona of Dr Manmohan Singh! Seemingly clueless, listless and rudderless as Prime Minister, he has suddenly begun exhibiting verve and vigour, and morphed, in a manner of speaking, into a mouse that roars!

He thumps the table and orders the mandarins of the Ministry, and the presiding deities of the Reserve Bank of India, Dr D. Subbarao; the Planning Commission, Dr Montek Singh Ahluwalia; and the Prime Minister’s Economic Advisory Council, Dr C. Rangarajan; to get cracking with the task of pulling the country out of the economic morass into which it has fallen.

More. Uncharacteristically for one who has been staid and prosaic to his fingertips, Dr Singh has commanded them to pump in plenty of ‘animal spirits’ into their domains, and is in no mood to take no for an answer.

Do the mandarins, at no frisky age themselves, know what they are in for? Can one trust them to be equal to what the dictionary defines as ‘the nervous energy that is the source of physical sensation and movement, vivacity arising from physical health and energy, a willingness to take especially economic risks’?

The very reading of this long description may quite conceivably leave them limp and exhausted!

DISTURBING DIP

The PM, wearing the FM’s mantle, wants a few more things done and pronto: Give a boost to the investor sentiment, both domestic and international; roll back the tide of doom and gloom; get rid of the sluggishness that has the economy in its grip, as evidenced by the fall in the rate of GDP, disturbing dip in the manufacturing sector, in particular, and industrial performance, in general; push up investment; avert looming crisis on the balance of payments front; increase institutional flows.

“We need to work to get the economy going again and restart the India growth story”, he is reported to have decreed.

Well, several questions arise. The PM’s wish-list is legitimate and relevant enough. But why is he giving the impression of waking up to them all of a sudden? His reported explanation is that he had been “away from the details and nitty gritty of finance for a long time”. Does that mean that Mr Pranab Mukherjee, as the Finance Minister, was not keeping him informed of all these factors and the steps needed to remedy them? Do the PM’s admonitions also imply that Mr Mukherjee had not been paying sufficient attention to all that Dr Singh has now enumerated?

In any case, the normal assumption is that a person in overall authority as the Prime Minister and as the leader of both his team and the nation would, at frequent intervals, review the results of implementation of policies with an eye on gaps and deficiencies, and impart the needed advice and guidance to all his Ministers, or at least to those holding charge of Ministries of vital importance, so as to maintain the quality of governance at the desired high level.

RUBBING INDIA’S NOSE

For instance, it was the political ballast and his own solid support that P. V. Narasimha Rao provided to Dr Singh that made it possible for the latter to bring about the historic turning point in the economic management of the country in 1991.

In other words, much of what the PM was demanding of the mandarins so late in the day was within the scope of his own power to bring about much earlier, if only the necessary inspired leadership was forthcoming from his end.

Reversing the downslide in regard to each of the items the PM has mentioned involves major policy decisions which the Government alone can initiate and implement.

His economic credentials will no doubt help him understand that financial institutions, rating agencies and investors abroad have in a sense colluded to rub India’s nose on the ground for its going back on FDI in retail, seeking to nullify the Supreme Court’s judgment in the Vodafone case and generally dragging its feet on economic reforms.

Denied thus unhindered access to India’s gigantic market, they are tightening the financial screws to make India see light. To what extent India is prepared to relent is a decision that only the Government as a whole can take.

To put the onus on tired, stale second rankers, averse to risks, is unfair.

Published on June 28, 2012

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