It isn’t often that the Prime Minister speaks his mind. The joke doing the rounds is that even dentists are exasperated by Manmohan Singh’s inability to open his mouth when required. But now that he has, it is worth analysing what he said in some detail.
In an interview to Hindustan Times (read the full interview here), Singh made several points about reforms, about corruption, about the UPA’s policy paralysis, and more.
Consider what he said on reforms. “The logic of an open economy and its benefits are still not widely understood among the general public. Public discourse still sees markets as anti-public welfare. The instinctive reaction of many, both in the political class and in the public at large, is to revert to a state-controlled system. There is no realisation that a reversal to an earlier era is neither possible nor desirable.”
This seems to be an honest economist wringing his hands in despair at politicians. But read between the lines, and the questions emerge. “What public discourse” have we seen on the benefits of an open economy? Manmohan Singh has been at the helm of affairs for 13 of the last 20 years – five as FM and more than eight years as PM — but not once has he tried to explain the benefits of an open economy, and how to make it work.
Moreover, is the problem a lack of public discourse, where the “instinctive reactions of many…is to revert to a state-controlled system” or the lack of buy-in from his own boss, Sonia Gandhi?
If there are three parties with utmost faith in an overwhelming role for the state, it is Sonia Gandhi, her son Rahul and the Congress party. Every scheme unleashed by the UPA has involved massive state spending on an unprecedented scale.
Surely, the only person Manmohan Singh has to convince on the benefits of the open economy is “Soniaji”. She is the one who needs to lead the public debate, but she has kept mum. And Manmohan Singh has not pushed her on this at all. Or was his interview meant for her ears?
But just when you think Singh must be a free-marketer, he puts on his political cap and says: “I worry that the fruits of an open economy will be increasingly captured by fewer people. I worry that a large segment of our population will be left out of the benefits of economic growth. We need to correct that fast.”
Weren’t NREGA and Food Security and farm loan waivers entirely about redistribution of wealth? Why is he worried when his government has almost bankrupted the exchequer in trying to help the deserving and the undeserving (the urban rich get the oil subsidies, the rural ones get fertiliser subsidies), and the corrupt benefit from any kind of state spending, since they can siphon it off?
Then he comes to corruption. He says: “Never before in the history of India have so many steps been taken in such a short time to bring in transparency into the functioning of government, make government accountable to the people for its actions and bring in measures to control corruption.”
His reference is to the RTI Act, and various bills on Lokpal, Public Procurement and protection for whistleblowers. He is surely right here, and the UPA needs to be complimented for these initiatives — even if they came as the result of civil society pressures. It proves his point that the government has been responsive, and tried to be accountable.
However, for a man concerned so much about probity and accountability, the PM failed to stop the loot he himself was witness to: in 2G, Commonwealth Games, et al. So his claim that “I do not think there has been any explosion in corruption under my watch” is surely suspect.
Apparently, the PM’s idea of integrity is narrow — restricted to not taking a bribe or indulging personally in corruption. But is that what integrity is all about? Keeping quiet when you see someone doing something wrong is integrity?
What is the point in having a bill to protect whistleblowers when the PM himself failed to blow the whistle on the 2G scam? He wanted instead to be kept at “arm’s length” from it all after A Raja did his own thing. Did he bring the matter at least to the notice of Sonia Gandhi? Maybe he did, but we don’t know.
Next, look at what he takes credit for. The post-Lehman stimulus package of excise and tax cuts that helped the economy revive quickly in 2009-10. Sure, he can take credit for it, but is the advocacy of spending more and more public money a particularly tough political decision to take? Every politician in the world did so. It is not something special that Manmohan Singh or his FM did to rescue the economy. In fact, our problems relate to what came next – after the stimulus. The answer is nothing. And so the economy is in decline.
The last point to note is on the question of policy paralysis. Here, Manmohan Singh’s answer is a political gem and a clear red herring. During UPA-1, he says, “there were a lot of things which had been done under the previous government which we had to undo. We had to bring a healing touch to the nation, make minorities feel secure and included, and give emphasis to the needs of the common man who had moved to the background in the Shining India of the NDA rule.”
The Gujarat riots surely did create a sense of fear and despair among Muslims, but the fact is this had very little impact on the economy or the policy-making abilities of the government. The economic recovery began in 2003-04, the last year of NDA rule, and Manmohan actually had nothing to “fix” after he took over. As for the “healing touch”, he gave Muslims lots of paper promises — the Sachar report, for example — and nothing else. His quota plan, rediscovered only during UPA-2 on the eve of the UP elections, was never implemented in UPA-1. It won’t be in UPA-2 either, if the courts have their way.
Manmohan Singh’s interview leaves one confused. At the end of it one does not quite know whether we were listening to an economist dressed up as a politician or vice-versa. Perhaps, it was both. Or perhaps, it was meant to tell Soniaji through an interview what he couldn't tell her directly.