Dr Manmohan Singh: An Economist Turned Prime Minister of India

 

Dr Manmohan Singh, an economist who practiced politics to steer India to a two-trillion-dollar economy, died on December 26, aged 92.

It was July 24, 1991. Venue: Parliament House, New Delhi. Occasion: Presentation of Union Budget for the year 1991-92. As Dr Manmohan Singh started appraising members of Parliament about India’s economy which was “in deep crisis” owing to large and persistent macroeconomic imbalances, low productivity of investment, unsustainable increase in government expenditure, budgetary subsidies grown to an alarming level, excessive and often indiscriminate protection provided to the industry that has weakened the incentive to develop a vibrant export sector, alarming current account deficit, depleted foreign currency reserves, etc., no one had any inkling that India is about to tread a new path in search of prosperity.

Stressing that “there is no time to lose” and “there can be no adjustment without pain”, and solely guided by the principle “that ultimately all economic processes are meant to serve the interests of our people”, Dr Singh gently nudged India away from the out-lived Nehruvian economics to a path of liberalization. This shift at once freed India from the shackles of a socialist-ideology-driven, ‘inward-looking’ growth path by launching far-reaching economic reforms.

Foreign trade, foreign direct investment and exchange rate regimes were all redefined. A two-stage devaluation of the rupee against the US dollar and a shift in the exchange rate regime that permitted current account convertibility of Indian rupee were among the fundamental changes introduced. The financial sector was overhauled: foreign capital was allowed into the banking and insurance sectors; ad-hoc treasury bills were abolished; and the government was no longer permitted to monetize its deficits by accessing the Reserve Bank of India’s resources. Instead, the government was made to borrow funds from the market to bridge the gap between revenue and expenditure; stock market operations were made transparent, which led to active participation of FIIs.  Taxes were lowered, the ‘License Raj’ was dismantled, and restrictions on the growth and diversification of large industrial houses were removed by scraping the MRTP Act. Simultaneously, the public sector’s monopoly was limited to a select few areas. 

Dr Singh could face irate Congress MPs, who could not digest his wide-ranging reforms, which included a steep cut in fertilizer subsidies, hikes in petrol and LPG prices, etc., with elan. By scaling back the proposed 40% increase in fertilizer prices to 30%, while standing firm on petrol prices, he could create a win-win outcome for both the party and government—a fine display of political economics. Thus, in a very subdued way, Dr Singh could reform India’s economic policies radically reconfiguring the country’s previously much-heckled “Hindu growth rate” of around 3 to 3.5% to an impressive 8% plus per annum. 

Born on September 26, 1992, in a village called Gah in West Punjab, now in Pakistan, migrating to India during Partition, this economist obtained his Bachelor’s and Master’s degrees in Economics from Panjab University in 1952 and 1954 respectively. He went to Cambridge University and obtained an Economic Tripos in 1957. Throughout his student career, he consistently achieved top honors in every educational institute and received scholarships, including for PhD—a rare achievement. In 1962, he received his DPhil in Economics for his research on “India’s Export Trends and the Prospect for Self-Sustained Growth” from Oxford University. 

Dr Singh’s academic excellence was such that jobs began chasing him as soon as he completed the Economic Tripos. His career spanned academia—Panjab University and Delhi School of Economics— and public service. During 1966-69 he worked for the United Nations Conference on Trade and Development. It is at UNCTAD that he is said to have learned how to reconcile differences, achieve compromises and negotiate in the international economic system, which appears to have come in handy for him while navigating through the maze of the political system as Finance Minister and later as Prime Minister.    

In 1971, he was appointed as Economic Advisor at the commerce ministry and in 1972, promoted as Chief Economic Advisor in the finance ministry. During 1980-82, he made valuable contributions as a member of the Planning Commission. In 1982 he became the youngest Governor of the Reserve Bank of India. As governor of RBI, he objected to the finance ministry’s willingness to grant permission to BCCI to open a branch in India by offering to resign on the issue. In 1985 he became the deputy chairman of the Planning Commission. During 1987-90, Dr Singh served as the secretary-general of the South Commission, an independent economic policy think tank based in Switzerland. Returning to India, he chaired the University Grants Commission in March 1991. Thus, he had a brilliant career enjoying the scope to work both nationally and internationally with the best of minds.  

It was with such a rich and varied experience that Dr Singh started his political career by accepting the call of the then Prime Minister, PV Narasimha Rao to be his finance minister in 1991 and the rest was history. After serving as leader of the opposition in Rajya Sabha from 1998 to 2004, Dr Singh took oath as the 14th Prime Minister of India on May 22, 2004, and again on May 22, 2009, for the second term. 

As Prime Minister, his notable achievement during his first term was the Indo-US civil nuclear cooperation agreement that opened up a new opportunity for our nuclear scientists by plucking them out of nuclear quarantine, to integrate themselves with the major global players and gain scope to push forward their technical competence in ensuring energy security for the country.  Dr Singh, a man of conviction and a leader willing to take political risks even if they were potential enough to jeopardize the very survival of his government, once again proved his ability to launch India on a new trajectory of strategic relationship with the United States. 

It was during his tenure as PM that India emerged on the global stage as a humanitarian assistance and disaster relief first responder, deploying its naval and air force missions with a total of 32 ships and 5,500 troops to provide relief to tsunami-affected Indonesia, Sri Lanka and Maldives. His engagement with the US, Japan and Australia in various meetings led to the formation of the Quad. This engagement with the Quad resulted in a breakthrough in India’s relations with Japan, which ended the country’s following the 1998 nuclear tests. It also helped India secure waivers from the Nuclear Suppliers Group, enabling access to nuclear fuel without signing the Nuclear Non-Proliferation Treaty. Indeed, much can be said about his foreign policy successes as Prime Minister, and as he often said, all of this was made possible only because he was ready to sacrifice power if the cause was right. 

During his tenure as Prime Minister, several rights-based laws were passed. These include the Mahatma Gandhi National Rural Employment Guarantee Act, Right to Information Act, Right to Education Act, National Food Security Act and Forest Rights Act. However, the sanctity of the Debt Waiver and Debt Relief Scheme was seriously questioned by many economists. That aside, his second term as PM was marred by corruption charges in spectrum auctions, coal block allocations, etc., though none of them implied any personal involvement. In general, his second term was mostly accused of policy paralysis. Dr Singh, the pioneering reformist, was to pay a heavy price as PM by allowing his finance minister to go ahead with the infamous retrospective tax amendment.

Nevertheless, Dr Singh’s reputation of incorruptibility always kept him in good stead. His willingness to listen to views and opinions from advisory bodies, parliamentary committees, etc., and to take them into consideration for policy formulation is quite laudable. For instance, in 2012, while launching the revised edition of the book, India’s Economic Reforms and Development – Essays for Manmohan Singh in his august presence, Ishar J Ahluwalia arranged a panel discussion. Inviting the first panelist to speak, she announced, “We have an agreement with Prime Minister that ‘he is here to listen and not to speak’”, which is a testimony to Dr Singh’s passion for hearing fellow economists’ frank opinions and benefiting from them while framing and implementing policy changes. 

Dr Singh’s dedication to inclusive growth and the welfare of the common man was phenomenal. Dr Subba Rao, former Governor of the RBI, beautifully highlighted this commitment of Dr Singh by quoting one of his conversations with Dr Singh. It seems while going to take charge as the RBI governor, he sought Dr Singh’s advice. Smiling, Dr Singh responded, “What advice can I give you? You know the country well and you have worked at different levels…” However, as Dr Rao was about to leave, Dr Singh, with his characteristic grace, escorted him to the door and said, “Dr Rao, so far you have been in government, but the RBI is a different institution. Once you are there, there will be a risk of you getting immersed in numbers ... money supply, credit growth, repo rates, interest rates, inflation rates. There is a risk of you forgetting that real people are behind that … please keep your ear close to the ground and never lose sight of the fact that your decisions affect real lives”. 

Dr Singh’s defining legacy lies in pursuing the ‘politics of purpose’ in a duplicitous and virtueless arena, all without sacrificing his integrity, sincerity, loyalty, and humility. At an election rally, he once said: “We should criticize opposition parties and their policies with which we do not agree”, but not by using words that are “insulting” nor belittling the “dignity” of the party. While conceding that power-seeking is the legitimate goal of political parties, he emphasized that “to achieve the goal, no party should follow the route of cheap publicity...” A statesman alone can make such a statement at a political rally! In a similar vein, in an interview to The Hindu when former Prime Minister Atal Bihari Vajpayee died, Dr Singh, quiet in a non-partisan style said: “In relations with the United States, and ties with Pakistan, I took more or less the same line as Mr Vajpayee had taken”—a rare feature in Indian politics.  

As CPI General Secretary D Raja observed, Dr Singh “had deep respect for democratic values. Despite ideological and policy disagreements, he maintained a spirit of decency, civility and fairness. His ability to engage with diverse views, his willingness to listen, and his unwavering commitment to the principles of democracy made him a statesman who earned the respect of all, regardless of political affiliation”. 

Dr Singh, who practiced the political philosophy of “Be detached to power and attached to purpose”, will always be remembered by India for his intellect, diligence, academic approach to work, accessibility, humility, and steadfast commitment to the country’s economic progress and welfare of the marginalized.

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