Dr. Manmohan Singh is a man of few words, but his innate quality to have his say on crucial issues provides a rare toughness to his character. On his 85th Birthday, let us traverse his journey and explore this perspective of the man who has contributed so much to India.
A quarter of a century has lapsed since India changed decisively. Twenty five years ago, the then Finance Minister delivered a budget speech that changed India forever. The contents of the speech marked a paradigm shift in India’s economic thinking and laid the bedrock of India’s economic development, providing a vision for the future that has been embraced by every political party since then. Two-thirds of the last twenty five years in India’s economic history can be truly attributed to the one person who radically changed India. The one person, who is supposed to be a man of few words, but of strong actions – Dr. Manmohan Singh.
As Dr. Manmohan Singh celebrates his 85th Birthday, today – he should be a fairly satisfied man, having contributed so immensely to India’s growth and achievements. But, he is not. He is soon going to return to his earlier job of being a teacher. He will be teaching what he knows the best – economics; at his alma mater, Panjab University. Such is the humility and humbleness of the man that he actually inquired to a parliamentary panel seeking to know whether this ‘job’ would satisfy the parliamentary codes and procedures.
Dr. Manmohan Singh’s contribution cannot be chronicled in a single essay. There are radical initiatives and then there are things which were small steps that had big impacts. Right from the New Industrial Policy of 1991 to FDI in the UPA years, right from computerization of banks as the Governor of Reserve Bank of India to Digitalization of our identities (UID – AADHAAR), Right from Economic Liberalization to the Civil Nuclear Agreements. Each step Dr. Singh took was faced with stiff opposition and immense public scrutiny.
Dialogue to Accommodate
Dr. Singh’s daughter, Daman Singh in her book ‘Strictly Personal’ vividly describes this attitude of her father to deal with tough situations. When Dr. Manmohan Singh took over as the RBI Governor, the RBI was faced with the issue of constant collision with trade unions. There were demonstrations every now and then. In the words of IG Patel (his predecessor), “The RBI was bedeviled with militant trade unionism, ever since he took over”. However, that did not continue during Manmohan Singh’s term. Why? Several trade unionists were sacked, but Singh reinstated them. He recounts that he reinstated them because he thought that the bank needed a new approach. He wanted to give them a chance to reform and moreover, he felt that a position of antagonism cannot be very productive. “Industrial relations are more than merely enforcing discipline. One has to look at the human side of problems- why do people have certain feelings, how can we deal with them as human beings”, quips Singh in the book.
When asked about the fact that this was one of the first big issues that he had to resolve, and whether he didn’t want to be appear tough, Singh says, “I don’t believe in empty strength. Strength is something that has to be inherent in your thinking. Strength comes from a conviction that you are doing is the right thing to do.” Later on, there was a genuine effort from trade union leaders to understand the management, and during Dr Singh’s tenure, the strike formally ended. A situation of confrontation changed to a process of dialogue.
Crucial Economic Decisions
These qualities of Dr. Singh stood him in good stead when he became the Finance Minister of the country. When asked in the context of economic reforms, as to whether the people understood what was going on? Or was it too complicated?
Dr. Singh explains, “Economics is not an easy subject to understand. As soon as I became Finance Minister, I told the Prime Minister that the country was in deep crises, and that we had to do certain things to get the country out of those crises. He said that we should put this before all the leaders of major political parties. He convened a meeting and I told them frankly that this crisis was looming large in the country and therefore we needed the cooperation of all parties. Also, that the country was in such difficulties that we couldn’t get back normalcy in a short period- it would take two to three years. And short of telling them that we were going to devalue the rupee, I told them all the things that were necessary to control the fiscal deficit, to change the thinking on industrial policy, to liberalize the economy.”
Asked whether those people realized the gravity of the situation? Dr. Singh remarks, “I think most people did. Thinking people did. The very fact that we had to ship some gold abroad to raise a small amount of money helped me- in a way- to launch those policies. I said that we would resolve the crisis and bring back the gold. And we did’.
What were the risks?
Singh retorts, “Well, one thing was quite clear- if this did not produce results in a reasonable period of time, I would be removed”.
Although Dr. Singh had stated that ‘those things’ would work out in two or three years, the economy recovered much earlier.
Politics of Reforms
From his days in the Planning Commission, Dr. Singh knew P V Narasimha Rao, who was then a Cabinet Minister. But one wonders whether the Prime Minister had known and fathomed the latter’s perspective of economic policy.
Did Narasimha Rao put his foot down on anything?
Dr. Singh elaborates, “Well, I had to get his consent. I didn’t get the rupee’s exchange rate, I had to get his consent. I didn’t get the consent of the Cabinet because it was too sensitive a matter to be discussed in the Cabinet. But Narasimha Rao ji was taken into confidence at every stage. We also put the industrial policy to the Congress working committee (CWC). Once it had approved of what we were doing, I was able to put our whole plan of liberalization in my budget speech.”
Did Dr. Singh speak before the CWC?
“Yes I had to speak. Also I said that what we were doing was nothing new. It was essentially Rajiv Gandhi’s vision, and had been spelt out in the Congress party’s manifesto for the 1991 elections. And therefore we were not going off the path charted carried the day.”
It was left to Dr. Singh to explain the detractors, and he convinced them.
“The Congress parliamentary party discussed the budget, why we had cut subsidies for fertilizer, and such things. At that time there was a lot of opposition. I had to defend these measures myself. And I knew there were a lot of non-believers in the Congress parliamentary party. When the Tirupati session of All India Congress Committee took place in 1992. I had to explain and defend what we were doing. Liberalization was a new thing. There is always fear of the unknown. There was a feeling that we were departing from the Congress party’s philosophy. Some people believed in the old system. And there were others who doubted that the new system would work. But so long as things worked, I think most people did not oppose it.”
As Prime Minister, one of the most cited moments of his first tenure was when Dr. Manmohan Singh faced the litmus test of his policies during the signing of the Indo-US Nuclear Deal. Singh had to endanger his position as the Prime Minister and his coalition Government as the Left parties had withdrawn support, opposing a deal which would end India’s nuclear apartheid in the world. In an interview to Hindustan Times, Singh’s undaunted spirit was exhibited when he said he was ‘ready to resign’ if the deal did not go through.
Critics point out this stubbornness of Dr. Singh for a deal which in their view has not really materialized. However, that is incorrect and is a story to discuss some other day. The moot point is the ‘stubbornness’. Yes, the stubbornness to negotiate the best deal in the paramount interests of the country.
Not many people know that the night before the execution of this historic agreement with the United States, Singh almost called off the deal. This was revealed by former national security advisor, M K Narayanan, a decade after the signing of the deal. The reason, as Mr. Narayanan notes was that the Americans had suggested that the Indians can leave only two nuclear reactors out of international safeguards.
There was an “understanding” between the Prime Minister’s Office and the US President’s office that six to eight reactors would be kept out of the international safeguards, mentions Mr. Narayanan
“The (US) State Department had a lot of people who wanted to teach India a lesson. By the time the visit was due, the number agreed on — six to eight — was reduced to two. That figure was totally unacceptable,” he said.
Describing the sequence of events after midnight on June 18 (when Mr. Singh was visiting the United States), Mr. Narayan quoted the former Prime Minister’s words, “If the Chairman of the Atomic Energy Commission and the National Security Advisor are not willing to go along with the figure, let’s call it off”.
Such a decision sent a strong message to the Americans, Mr. Narayanan said.
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