The Magnificent Seven: Finance Ministers Who Shaped India’s Destiny

There are seven of them. Seven finance ministers, who comprise a financial band of magnificent men and women (India had the first independent woman FM in 2019), and who changed the course of India’s economy. Between 1991 and 2021, through policy vehicles, which included 31 main Budgets, and a few interim ones, they defined and refined, imagined and re-imagined, discussed and debated how the market’s invisible hand could deliver discernible results.

They were both idealists and pragmatists. They were social philosophers and economic scientists, welded into one. They were driven by not what was, but what could be, as also the electoral realities. They steered the country by taking sharp and blind right turns, and sometimes lost their way and took random left cuts. They raced ahead with their ideas on a few occasions, and were forced to turn back at a few crossroads. These FMs married market mantras with socialist slogans.

In effect, they changed us and our society. Three or four generations went through sweeping, far-reaching and mind-altering conversions because of these passionate proselytisers. Ever since the Congress’s Manmohan Singh presented his first Budget and laid down the capitalist commandments in the new industrial policy on July 24, 1991, life was never the same again. Three decades later, as the seven FMs stoked our desires and aspirations, our attitudes towards wealth, consumption, entertainment and connectivity have become vastly different.

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High GDP growth was their overriding priority and goal to get rid of the plague of poverty, and push people towards prosperity. In the 1996 speech, P. Chidambaram (United Front), who presented the largest number of Budgets during three stints, loftily claimed: “Growth will be our mount, equity will be our companion, and social justice will be our destination.” A year earlier, Manmohan had echoed a similar thought, when he said that “growth and restructuring are not ends in themselves”.

Manufacturing was the tool to employ more individuals, raise incomes and living standards, and remove the curse of poverty. In his various speeches, Manmohan said that if industry, which was free from the shackles of the licence-quota-permit raj, was competitive, it would help the farmers. He added in 1995 that the “changes” related to industry “will be far more significant…than any programme of special subsidies”. Jaswant Singh (NDA-1; 2003) wanted to rekindle the citizens’ creative genius to convert the “liability of want into the asset of ability”.

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The focus remained on the poor and deprived. In his 1998 speech, Yashwant Sinha (NDA-1) was emotional: “I have recalled to myself the face of the poorest and weakest man I’ve seen, and made sure that this Budget is of use to him.” In 2014, Arun Jaitley (NDA-2) was categorical that the poor too wanted to be a “part of the middle class”. In her first speech in 2019, Nirmala Sitharaman claimed that her government’s “signature was in the last-mile delivery (to the people)”.

As Pranab Mukherjee (UPA-2) said in his 2010 speech, “Growth is only as important as what it enables us to do.” If it generates employment across castes, classes and communities, improves incomes, and allows us to access basic and other amenities and lead better lifestyles, it is desirable. But if it enhances inequalities, starves millions and leaves a sizable percentage unemployed, it is a wasteful exercise. As Singh had astutely observed, growth is only a means, and not an end.

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Suitcase to Bahi Khata

Manmohan SIngh, Budget 1991 (left); Nirmala Sitharaman, Budget 2021

Higher farm incomes and viable farming as well as more and lucrative employment options were two essential ingredients for a development-prosperity recipe. The seven FMs tried to inject new policy doses to energise agriculture. Their attempts culminated in the three recent farm acts, which led to an uproar and protest among the croppers. We will explore why this happened, as we flesh out the half-baked and ill-thought-out interventions in the earlier years.

One of the three recent acts was related to the ‘one-nation, one-market’ theme to give freedom to farmers to sell their produce across the country. The logic was that the growers can sell in markets where prices are higher. But Manmohan Singh first talked about a “unified national market” without “administrative restrictions on movement of agricultural products”. Sinha aimed for “free inter-state movement of foodgrains”. He allowed some growers to sell directly to the food processors.

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A second act dealt with the dismantling of the Essential Commodities Act (ECA), which allowed the Centre to control prices and monitor distribution of certain crops. However, since 1991, the FMs diluted the provisions of this law, as they took products out of its purview. The reason is that if market forces influence prices, the croppers are likely to earn more. Past FMs initiated several experiments with corporate farming, which formed the essence of the third act.

However, as the farmers discovered, past policies hurt them more. The concept of ‘one-nation, one-market’ remains a non-starter as the majority of land-tillers don’t have the financial means to reach the nearest marketplace, forget about selling across the nation. The dilution of the provisions of ECA over the years led to wild and weird price fluctuations, which destroyed rural families. Corporate or lease farming yielded inconsistent results; it harmed as well as benefited the growers.

Despite these failures, apart from the successes in annual production and exports, the FMs remained gung-ho about how they could, and would, revolutionise agriculture. In 1992, Manmohan Singh hoped to start a “new chapter” for farmers and, in 2002, Sinha spoke eloquently about “Kisan ki azadi (freedom of the farmer)”. During his tenure, Jaswant Singh visualised a “second revolution, to follow the earlier Green Revolution (which led to both gains and losses)”.

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As far as urban employment is concerned, it peaked in the 1990s and plummeted thereafter. In this century, we witnessed a long period of jobless growth, i.e. an era that created minimal jobs, followed by years of less-jobs, i.e. a reduction in the number of opportunities. Even in the pre-Covid scenario, the unemployment rate was the highest in the past four decades. Today, it is possibly the highest since independence, even as GDP growth has behaved haphazardly in the past 8-9 years.

What is worse is that unemployment is possibly understated. It is calculated as a percentage of people without jobs among the working-age population that is in the job market. Hence, if a person doesn’t work and is not a job-seeker, she is not statistically unemployed. But the reason for her opting out may be varied—lack of preferred jobs, family and social pressures, and meagre salaries. Sadly, a growing proportion of Indians, especially women, shun work. Between 2015 and 2018, the number of women in the 15-59 age bracket who opted out of the job market ballooned by a steep 20 per cent. They didn’t wish to work.

The seven brave FMs will wish to sweep these negatives under the carpet. They will claim that despite growth glitches, immense inequalities, unusual unemployment and agriculture anxieties, the number of poor nosedived. Data shows that the figure tumbled from 500 million in 1991 to 50-200 million; the latter number depends on which statistician one believes. If it is around 200 million today, it is still too high. Add to it the 200-300 million in the low-income group. Imagine the weight of this mass of people that needs to be lifted up—soon.

(This appeared in the print edition as "Remaking of Free India")