In the death of Manmohan Singh, 92, India has lost a statesman who was a rare breed – scholarly, dignified, self-effacing and driven by a sense of service. Though he was a member of the Rajya Sabha till February this year, failing health in recent years had prevented him from being a pointed participant in public discourse, which he conducted with politeness and grace – an aspect of democratic politics, which is clearly missing today. As a public figure, he was not without fault. He tried to stay away from the cut and thrust of politics by being as sparingly combative as possible in his dealings with political rivals. This was possibly because he had a spotlessly clean image, which he did not want to be sullied. More disappointingly, he maintained a stoic silence in the face of his own party’s sordid record of skulduggery. It is said that politics was not his real calling. But, then, this was his strength – and weakness.
To understand Manmohan’s role and contributions, one needs to hark back to 1991, when the world’s most populous democracy was on its knees. With India dependent on oil from the Middle East and barter trade with the Soviet Union – a country that would soon cease to exist – our foreign exchange reserves had fallen to a record low. Home-grown critics had long complained about India’s ‘Hindu rate of growth’, an anaemic 2-3 per cent per year. The fiscal deficit was 9.4 per cent of gross domestic product, the current account deficit had widened to 3 per cent and the country had meagre foreign reserves of about $1.7 billion – enough for three weeks of imports. (Today, the reserves exceed $650 billion.)
It was in 1991, as India reeled under the balance of payments crisis that Manmohan was appointed the finance minister by former Prime Minister P.V. Narasimha Rao, who needed a man in the North Block, who could understand economics as only an economist does and not a politician. It turns out that Rao had first offered the job to economist and Manmohan’s friend I.G. Patel, who could not take up the job. P.C. Alexander, the veteran bureaucrat, who was advising Rao in cabinet formation, then suggested Manmohan’s name. In 2004, he turned out to be the shrewd choice of Sonia Gandhi as well. Sonia possibly wanted a captive PM, which the other pretenders to the throne like Pranab Mukherjee and Arjun Singh would not have been. Thus, he was as much an accidental FM as he was an accidental PM.
Manmohan Singh will always be remembered for beginning the process of unshackling the economy and opening up the doors for foreign investments in myriad sectors during his time as finance minister. Subsequently, as prime minister, he pushed back on his Left allies’ resistance on issues like easing telecom and insurance FDI limits and pursuing the critical India-US nuclear co-operation deal. It will be instructive to recall his 1991 budget speech, when he explained in painstaking detail the need for India to embrace a new era of industrial delicensing and economic liberalisation, that paved the way for everything from cars, shoes, burgers and stock market trading accounts that Indians now take for granted. Noting that the efforts of former prime ministers, Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi, had given India a ‘well-diversified industrial structure’, he didn’t hesitate to link the genesis of the 1991 crisis firmly to policy failures of the past, including the entry barriers for firms, proliferation of licensing and an increase in monopolies that hurt consumer interests.
The present-day generation would do well to know that his maiden budget set the foundations of India’s modern stock market boom, as he announced the formation of the Securities Exchange Board of India (SEBI) to protect investor interests. Or that he talked passionately against protectionism and batted for consumer interests as well as wealth creators, even has he held strong reservations against ‘mindless and heartless’ conspicuous consumerism – issues that resonate today as well. It speaks volumes for his sagacity that he could take on the staunchest criticism with a dose of humour or literary references. So, when the Left attacked him for drafting a budget policy on the diktats of the World Bank, he joked that the WB’s interests were indeed at work – adding that it was the interests of the then Communist-ruled West Bengal (WB) instead.
If his prescription to deal with the severe economic crisis changed Indian trajectory in 1991, his taking over as the country’s premier in 2004 was also turning point for India’s foreign policy. Slowly, but surely, there was a gradual departure from the Nehruvian approach of non-alignment, as his government sought to forge ties with super-powers including US on a more equal footing. Indeed, the high point of his 10-year long prime ministership was his handling of the Indo-US nuclear deal. The economist-turned-politician almost single-handedly turned the tables on the Left parties – providing outside support to the Congress-led United Progressive Alliance – by securing the support of Samajwadi Party in a crucial trust vote in July 2008 over the India-US nuclear deal. Until then, relations between the Congress and Samajwadi Party were one of suspicion and distrust as Mulayam Singh Yadav had reneged on his promise of supporting a Congress-led government headed by Sonia Gandhi in 1996 after the fall of the 13-day-old Atal Bihari Vajpayee government.
Though the nuclear deal has failed to deliver the goods to India in terms of cutting-edge nuclear technology and reactors, it served the important purpose of demolishing a Cold War barrier.
As PM, he made a mark as a global statesman and his economic views were sought at forums like the G20. His government also oversaw path-breaking legislations like MGNREGA and Right to Information and the law that guaranteed the right to free and compulsory education for children between the ages of six and 14, significantly reducing the school dropout rates. His government also introduced the unique identity project Aadhaar to improve financial inclusion and delivery of welfare benefits to the poor. The importance of some of these measures is underscored by the fact that MGNREGA allocations have significantly gone up under the present government, which also has continued to keep Aadhar as a cornerstone for many of its policies.
But that was also the time when his image took a beating as a string of alleged scams like the 2G spectrum allocations, coal block allocation and the Common Wealth Games dominated the headlines. Inflation and price rise made the common man angry, while corporates started talking about ‘policy paralysis’ under him. In September 2013 – while Manmohan was on an official visit to the US – the public disapproval by Rahul Gandhi, then Congress vice-president, of a controversial ordinance added to his public discomfiture. The ordinance was brought to shield convicted lawmakers from immediate disqualification and was meant to protect Lalu Yadav, arraigned in the fodder scam case. Eventually, it had to be withdrawn. Manmohan is reported to have had serious reservations about the ordinance but was told by Sonia’s aides to have it issued to keep Lalu, then a key ally in the UPA, in good humour.
Manmohan was also seen as weak on terrorism: No one had forgotten the terror attacks in Mumbai in 2008, when terrorists from Pakistan attacked two of Mumbai’s leading hotels, its main railway station, and a synagogue, killing 175 people. The gang rape and murder of a woman on a bus in Delhi in 2012 dented his image even further, in part because of Singh’s lacklustre address to the nation at the time and also because security forces were heavy-handed in dealing with protesters angry with the government over the rape.
The Bharatiya Janata Party succeeded in amplifying the message that Manmohan was ineffectual, that Congress was weak on terrorism and appeased minorities and that Hindus needed to unite under a strong leader such as the ultra-nationalist Narendra Modi. Combined with allegations of corruption, such accusations created a perfect storm: In early 2014, the 81-year-old Manmohan, who had undergone two cardiac surgeries, said he would not seek a third term. In elections that year, the BJP came to power, the first time a single party secured a majority of its own in 25 years.
That may have been the end of Manmohan’s political career but history will surely remember him as a gentle and urbane reformer known for his personal integrity. In his autobiography, Alan Greenspan, former US Federal Reserve chairman, credited Manmohan for tearing a modest hole in India’s regimented economy in 1991 and demonstrating that a little economic freedom and competition can exert extra-ordinary leverage on economic growth. That task, as any economist would admit in private, remains incomplete, and some of those themes resonate even today, if not louder. His exit leaves a vacuum in public policy discourse, the absence of which may make it tougher for India to rip apart the hole he managed to tear, in what Greenspan called India’s Fabian socialism fabric.