From Rao’s aide in 1991 to Modi’s pain in 2016: Is Subramanian Swamy a lost cause?
Over the last two-and-a-half decades, Swamy has transformed himself from someone who played a notable role during the Narasimha Rao-era of 1991 economic reforms to being Narendra Modi’s constant pain in 2016. Swamy is a lost opportunity for India.
In his book Half-Lion: How PV Narasimha Rao Transformed India, author Vinay Sitapati, talks about the evening of 19 June, 1991 — two days before Rao took charge as Prime Minister of India. The economy was in the midst of a crisis and Rao was trying to gauge its depth. Sitapati narrates a phone conversation between Rao and ‘Harvard-trained economist’ and 'commerce minister in the previous government' Subramanian Swamy.
“I know about the reforms you were working on (as commerce minister). Send me the documents,” Rao asked Swamy.
“I have one cabinet note. The rest are typewritten sheets which I will get through to you,” Swamy replied.
Swamy then told the prime minister designate: “Focus on Economy”.
Under Rao, India kicked off its biggest-ever economic liberalisation exercise in the following days and reaped its result in the later years by way of high growth. Swamy indeed had a role in the reform era.
That’s in the past.
Nearly two-and-a-half decades later, Swamy, who in the 1990s had his notable contribution to India’s economic reforms process, is more like a trouble-maker both within and outside his current political party and his expertise in economic matters and his contributions to the economy are hardly discussed anywhere.
Swamy is in news for all wrong reasons.
The prime minister under whom he currently works — Narendra Modi — didn’t mince any words while publicly disowning Swamy on Monday.
“If anyone believes he is above the system that is wrong. Publicity stunts won’t benefit the nation,” Modi said in an obvious reference to Swamy after his recent tirades against the RBI governor Raghuram Rajan and finance minister, Arun Jaitley. Swamy also attacked the chief economic advisor Arvind Subramanian and the economic affairs secretary Shaktikanta Das with largely unsubstantiated allegations.
Isn’t it an irony that one of the best experienced, economic minds that is available to the NDA-government is on the wrong side of his own government at a time when the country badly needs yet another round of big-bang economic reforms?
The government could have used Swamy's experience and expertise in the subject at such a crucial time. Perhaps yes, if Swamy chose not to proceed on a self-destructive mode with his off the cuff comments and below-the-belt attacks on almost everyone who cross his path.
In a way, Swamy carried a bag full of landmines when he took over as a BJP MP a few months back to plant it on those roads he intends to take a while later. And without fail all of them did the job but did more harm to their originator than the targets.
Even his enemies wouldn’t question Sway’s economic wisdom. Swamy, who handled commerce, law and justice in Chandra Shekhar government, had played a role in aiding the economy during the phase of economic turmoil at that point.
$2 billion IMF loan
In January 2013, delivering a speech on, ‘reasonable capitalism’, Swamy recalled his days in 1991 when he had an encounter with the US Ambassador to secure its support for a loan worth $2 billion from the International Monetary Fund (IMF) for India in exchange of facilitating US war jets to refuel on Indian soil during the first Iraq war.
Swamy is someone who appreciates former prime minister Rajiv Gandhi’s role in economic reforms but was critical of Gandhi’s decision in letting companies avail short-term loans, which resulted in a financial crisis.
Here’s how Swamy put his crucial conversation with US Ambassador who asked Swamy what India needed in exchange of refueling facility.
"He (the US ambassador) asked... what do you want? I said we want $2 billion because we are on the verge of becoming bankrupt. He asked 'you want it from the United States?' I said no... from the IMF and without conditions.
"He said 'how can I get you money from IMF'. I said, you have 87 percent voting right in IMF. So, if you want landing rights, then on Monday I want $2 billion," Swamy said.
"He (the ambassador) said today is already Friday... I said in Washington it is still Thursday night.
"So, they gave us $2 billion... and they were given landing rights... we changed our landing policy," Swamy said.
Not in agreement with Modi’s economic policies
But, Swamy has never in total agreement with Modi-government’s economic policies including in matters pertaining to the readiness of the government to face an economic crisis and even the crucial nature of Goods and Services Tax (GST) in economy, which might have acted as a turn off to Modi-government prompting it to keep Swamy at a safe distance.
In an article written for The Hindu titled ‘The way out of the economic tailspin’, Swamy said the Modi-government may be lacking readiness to face a crisis situation, possibly making a case for why the government should use him in finance ministry.
“As it stands at present, the Indian economy is headed for a crisis and a crash. The likely date is by early 2016 in my estimation. Can a course correction today rectify and rescue the economy from a crash? Yes, of course, but only if there are short-term and long-term prescriptions to be followed. Does the Narendra Modi government have such contingency prescriptions ready? Not as of now,” Swamy said.
Swamy listed a host of reasons then why Indian economy may not be in good shape. These include high bank Non-performing Assets (NPAs), falling household savings rate, huge gap in infrastructure funding and issues of inefficient agricultural production. As a matter of fact, most of these issues remain critical even now. Similalry, on GST, Swamy has opined that the legislation, which is highlighted as a landmark reform, isn’t that crucial. "I don't think GST is going to be a game-changer. If it comes, it is okay. If it doesn't come also it is okay," Swamy has said.
What went wrong
Swamy is being seen as a persistent pain in the BJP government's side — if one was to go by the comments of the party leadership including those made by Modi last evening.
His image is far from an economic minds and more of a ‘trouble-maker’ and a double-edged sword that can sway either ways warranting caution not just to his opponents but even to his colleagues on the same side. Swamy’s tweets on ‘bloodbath’ and ‘hotel waiter’ targeting Jaitley have boomeranged to his own disadvantage.
Even his perceived closeness with Rashtriya Swayamsevak Sangh (RSS) — BJP’s ideological parent — doesn’t seem to be helping the septuagenarian garner support in his latest fights against North Block. This wasn’t the case in the Rajan episode, where the anti-Rajan lobby kept deliberate silence to give Swamy the go-ahead.
Swamy’s reaffirmed loose-cannon status in the BJP somewhat tells an observer that his chances to get into the core decision making process in the NDA government are next to nil, unless the pressure centre from Nagpur plays a big role.
Over the last two-and-a-half decades, Swamy has transformed himself from someone who played a notable role during the Narasimha Rao-era of 1991 economic reforms to being Narendra Modi’s constant pain in 2016.
Swamy is a lost opportunity for India.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
'Metro Man' E Sreedharan to join BJP ahead of Kerala Assembly polls, says move inspired by Narendra Modi
Sreedharan, who is credited with changing the face of the public transport system in the country, will join the BJP during the party's 'Vijay Yatra' commencing on 21 February from Kasaragod
If God wasn’t able to break the laws of physics, she arguably wouldn’t be as powerful as you’d expect a supreme being to be. But if she could, why haven’t we seen any evidence of the laws of physics ever being broken in the universe?
This step is expected to further enhance customer convenience, spur competition and raise efficiency in customer services, a ministry statement said