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25 years of Manmohanomics: Thank you Doc!

25 years of Manmohanomics: Thank you Doc!


“I honestly believe that history will be kinder to me than the contemporary media, or for that matter, the Opposition parties in Parliament”: Manmohan Singh in January 2014 announcing his decision not to seek re-election as prime minister.

It is now just over two years since Singh demitted office, but such has been the high profile nature of Narendra Modi’s prime ministership that the gent in the blue turban seems like an archival image from another era. And yet, this is perhaps as good a time as any to assess the contribution of Singh: This weekend, after all, marks 25 years since he delivered his landmark 1991 Budget speech opening up the Indian economy. There are unlikely to be any well-choreographed events to mark the occasion or attempts at self-praise. Singh in semi-retirement is a bit like the man was when he was the occupant of 7 Race Course Road : Low profile, self-effacing, and yes, mostly silent.

If we were to locate Singh in the context of contemporary politics, he will be perhaps referred to dismissively as a weak prime minister, someone who owed his position to the munificence of Sonia Gandhi. The shadow of presiding over big-ticket corruption in particular means that Singh is judged almost like a Dhritarashtra -like figure who simply didn’t do enough to rein in his avaricious Cabinet colleagues.

But if we were to rewind the clock back to the early 1990s, we might get a better sense of the man. The period between 1990 and 1992 is arguably the most turbulent in post-Independent India, second only to the dark Emergency years. VP Singh had uncorked the Mandal reservations genie that threatened to split the polity on sharp caste lines. The BJP had re-ignited the Ram Mandir agitation, a dangerous move that would result in the demolition of the Babri masjid and communal riots in several parts of the country. A prime minister had been assassinated, the Kashmir valley was burning and Punjab continued to simmer. And the economic crisis was so serious that the government was close to a default, foreign exchange reserves were down to just three weeks of imports and the government was airlifting its gold reserves to get temporary relief.

In this volatile environment, Singh was asked to shepherd the economy as Union finance minister. We could argue, as Singh himself has in a recent interview, that it requires a crisis for our policy-makers to act decisively. But act he did under the guidance of then Prime Minister Narasimha Rao. While credit must be given to Rao for managing the political fallout of economic liberalisation, we cannot minimise the role that Singh and his core team played at the time.

Rao was the wily politician, an artful practitioner of realpolitik in a coalition era. But it was Singh who provided credibility to economic measures that were looked at with suspicion by many within and outside the country. India in that period needed an individual who could reassure industry that sweeping reform would not harm their interests: Singh with his scholarly background, bureaucratic diligence and sharp administrative focus was just the man to provide the healing touch to an economy in ICU.

Indeed, of the three competing political forces at the time, the opening up of the Indian markets was probably the riskiest. The Mandal report was, in a sense, only acknowledging a ground reality of growing caste assertion; the mandir agitation was part of the core ideological agenda of the BJP; market economics, on the other hand, was seen to strike at the very root of the Congress, and the country’s commitment to a socialistic pattern of growth.

Twenty-five years later, mandir politics is now little more than background music that is heard only when there are elections in Uttar Pradesh. Mandal politics, as last year’s elections in Bihar showed, is still reflected through sharp caste identities but is largely confined to the Hindi heartland. If there is a sustainable all-India political phenomenon, it is the increasing appeal of a market-driven society, one that is captured by an aspirational India, or what Prime Minister Narendra Modi chooses to call the “neo-middle class”.

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Ironically, Modi, perhaps more than any other contemporary politician, has been a direct beneficiary of the forces unleashed by Singh in 1991. Without the benefit of “Manmohanomics”, there would be no “Modinomics”: The millions who have been lifted out of poverty in Gujarat and beyond in the last two decades and catapulted into the middle class are the result of the opening up of the economy in the Manmohan years as finance minister. At a time when the BJP was still stifled in its economic agenda by its Swadeshi warriors, it was Singh who was taking the tough decisions. Catchy slogans like “Make in India” and “Start up India” resonate today because Singh moved the political discourse away from anti-business rhetoric. He created the environment for a changing India which Modi was astute enough to seize and drive forward.

Sadly, the controversies that dogged the second term of Singh as prime minister were also perhaps the result of the less appetising side of reforms. Opening up of the economy created opportunities for large-scale profiteering through cronyism and corrupt deal-making. That Singh couldn’t control it only reveals his limitations as an accidental politician. Maybe, if Singh had retired or resigned in 2009 when it was clear that he would have to compromise with corruption to survive, he might be judged less harshly. Even so, as a man of quiet dignity who transformed India at one of its most difficult periods, Singh deserves our respect and appreciation.

Post-script: I met Singh last week to ask if he would agree to a TV interview on the momentous events of 1991. “Why do you want me to talk about myself? In any case, I don’t make good TV,” he sighed with typical diffidence. I guess not everyone wants to be on TV to make a mark.

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