ITS the last two sentences that former finance minister Dr Manmohan Singh uttered in his Home TV interview aired on the night of November 11 that gave the game away. "There are such things as leads and lags in economic phenomena. If you dont act or you act unwisely, it does not produce its results immediately, but in the medium term, it can have disastrous consequences." Yes, yes, yes, Dr Singh, the nail right on the head. So when earlier in the interview, you say that "there are signs (in the current economic scenario) which bother me", and mention that export growth is down "very substantially", that industrial growth has slowed, and inflation rate is going up, shouldnt you take the blame for all that? Naturally, there was a lag before the effects of the economic policies the Narasimha Rao government followed in its last 18 months appeared. They are appearing now.
Viewership for Dr Singhs first major TV interview since leaving North Block must have been high among the English-language audience, since Dr Singh has always been seen as an anomaly in Indian politics and has done more for the upper and upper-middle classesthat is, the English-language audiencethan anyone in independent India. Besides, he has just been inducted into the Congress Working Committee (CWC). So there was great interest in whether Dr Singh was going to put his successor in the Finance Ministry to the sword.
So did he? Yes, but so subtly that the interview can go down as a must-study lesson for aspiring politicians. Especially those in parties which have recently lost power and want to get it back soon, while being saddled with having to support a government made up of parties that you actually abhor. The message that comes across from the interview is: "I left behind an economy with so much potential just waiting to be grabbed, and these guys are just frittering it all away. Nothing personal about all this, its just very sad." So, soon after saying that "there are... signs that the firmness of purpose (with which) the economy should be handled is not there," he neatly balances that with "I will not say that the economy is slipping so badly that good management cannot bring it back on the rails". This is elder statesman territory: a wistful shake of the head, a left hand poised for a pat on the back if only these chaps would just get their act together.
How? Dr Singh had much to say on this subject, both to Home TV, and at the Nehru memorial lecture he delivered two days after the interview was aired. Get the fiscal deficit down (Dr Singh vowed to get it down to 3 per cent but ended up with 5.9, the figure he inherited as FM), lure in massive private investment in areas like power (MOUs for generating 78,500 MW were signed and not a single watt of new private power generated in his five years as finance minister), do away with subsidies in prices of economic services like electricity (average subsidy per KWh went up from 25.9 paise in 1991 to 27 paise in 1995), open up the insurance sector (something he avoided), and of course an all-out war against corruption. It all begins to sound like what Dr Singh really wanted to do as FM but could not due to political compulsions. And which he is now preaching due to other political compulsions.
In defence of his own deeds, he trotted out the usual statistics. Credit squeeze, what credit squeeze? Non-food bank credit rose by 57 per cent in his five years (but money supply grew by only 13. 4 per cent in 1995-96, against 22.2 per cent in 1994-95, and 18.4 per cent in 1993-94). He took credit for getting the inflation rate down to 5 per cent (and forgot to mention that the consumer price index rose 10.5 per cent in 1995-96, against 10 per cent the year before, and 7.5 per cent the year before that). He pointed out that he had garnered massive foreign exchange reserves for the country (but overlooked the fact that the reserves fell by over $3 billion in 1995-96). Two things he did not mention: that he cut government expenditure (government borrowing through ad-hoc Treasury Bills rose as much as 35 per cent in just 44 days at the fag end of Dr Singhs ministership to reach a new high of Rs 45,375 crore on May 24, 1996); and he did not mention that obscene lie that his government tried to foist on the country late last year, that only 19 per cent of Indians are now below the poverty line.
But why are we so bothered about what Dr Singh says? Why did the Editor ask me to write a page on one TV interview and one lecture given by a former minister? After all, who trusts politicians anyway? The simple answer is that we trusted Dr Singh. Even when he turned his back on economic reforms in early 1995, we felt empathy for him: he had been given orders that were politically motivated, and he was carrying them out like the efficient manager that he was. But when he willingly becomes part of the political smoke machine as a CWC member, one feels betrayed. One feels betrayed when he says that the 13-party coalition is not speaking in one voice and thus keeping the foreign investor away. Does he really expect us to believe that the United Fronts equivocation is a greater fear to the foreign investor than the sight of a former prime minister being investigated for corruption, and the uncertainty about signed-and-sealed deals falling through because of the telecom kickback scandal (and the petroleum one coming up next)? The firstand perhaps onlypress interview Dr Singh gave after relinquishing office appeared in Outlook (July 24, 1996). He was bitter, but confident that posterity would give a verdict in his favour. By trying to turn into just another Congress politician, he is testing posteritys patience.