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Tuesday, July 17, 2012
Manmohan Singh - India's saviour or Sonia's poodle'?
Once credited with rescuing India, Prime Minister Manmohan Singh now finds himself
accused of abject failure
Monday, 16 July 2012
He was hailed as the man who saved India. Twenty-one years ago, with the authorities in
Delhi obliged to fly 47 tonnes of gold to London to be secreted within the vaults of the
Bank of England as collateral for an emergency loan for food and fuel, Manmohan Singh,
then serving as finance minister, got to his feet in the country's parliament to deliver a
budget that broke, shatteringly, with the past.
"We shall make the future happen," said Mr Singh, announcing a series of liberalising
measures that cut away India's notorious red tape and ended the so-called Licence Raj.
"Let the whole world hear it loud and clear - India is now wide awake."
The reforms introduced on 24 July, 1991 - the privatisation of some government
companies, the reduction of import duties and the introduction of foreign investment - are
credited with sparking the economic regeneration of the country and improving the lives of
millions of people. In something of an air-brushing of history, Mr Singh received the lion's
share of the credit, while the role of the prime minister of the day, PV Narasimha Rao, was
But two decades on, the quietly-spoken Mr Singh, who studied by candlelight in a small
village to secure a place at Oxford University and then the World Bank, finds himself
accused of abject failure. Critics from business say his reforming zeal has evaporated and
slowed the country's growth, while political opponents say he has overseen an
administration that has revealed itself to be mired in corruption. From within his ruling
Congress Party there are repeated, if oblique, demands for him to step aside ahead in
favour of his presumed successor, Rahul Gandhi.
Last week, in the latest insult heaped up the 79 year old premier, Time magazine, which
only in April placed him 19th in its list of 100 most influential world figures, splashed the
front cover of its Asia edition with a forlorn image of Mr Singh and the headline "The
Underachiever". "India is stalling," the magazine claimed. "To turn it around, Prime Minister
Manmohan Singh must emerge from his private and political gloom."
Indians are not unique in being more sensitive to criticism from afar than that directed at
them domestically, but the magazine article hit a particularly tender nerve and the party's
representatives took to television studios to defend the prime minister. Manish Tewari, an
MP and spokesman for the Congress party, said the story had "deliberately" overlooked the
solid and concrete achievements of Mr Singh's two terms including consistent high growth
averaging more than eight per cent, a flow of foreign investment and a flurry of social
programmes. "Stories that break on Sunday evening…acquire a certain momentum of their
own," he said.
Meanwhile, the main opposition, the Bharatiya Janata Party (BJP), with its eyes on
general election scheduled to be held by 2014, seized on the controversy. Spokesman Ravi
Shankar Prasad said: "We are clearly of the view that in terms of economic management,
inflation and our sense of direction, the government has failed. We did not need the
verification of a foreign journal."
In truth, the article contained nothing that was new but it refocused people's attention on
a man whose reputation is at risk of being permanently damaged. Along with his ministers,
Mr Singh, who first became prime minister in 2004 and is now in his second term, has
received increasing criticism from various quarters as the country's growth has slumped
from a soaring nine per cent in 2007-08 to a "mere" 5.3 per cent in the first three months
of this year, the lowest since 2003.
The administration has been accused of sitting on reforms that could bring in new foreign
direct investment (FDI), such as the opening of the food retail sector, and failing to create
a sufficiently stable investment, leading to a plunge in FDI of up to 38 per cent in the first
part of the year. A decision this spring by the then finance minister, Pranab Mukherjee, to
allow retroactive taxation of companies was seen as particularly harmful. Last month, the
ratings agency Standard and Poor's threatened to downgrade India's investment category
and pondered whether it could become the first "fallen angel" of the so-called Bric nations.
Inflation is high and there is a trade deficit of around $13bn.
A Delhi-based business source who works with both Indian and international firms, said
India had slipped in the last couple of years from being a priority destination for any
foreign firm looking to expand its business, to one of several potential locations including
Indonesia, Brazil and Turkey. "It is still at the point where India can turn it around," said
the source, over a pot of Assam tea in the lobby of a hotel. "[But] there has been no
growth and no reforms but there is corruption and uncertainty."
Observers say one of Mr Singh's problems is that he has no genuine political power.
Rather, he owes his position to Sonia Gandhi, widow of former prime minister Rajiv Gandhi,
mother of Rahul and Congress Party chairwoman, who to the delight of India's middleclass
selected him for that role when her party won a surprise victory in 2004. This has meant
he has sometimes been unable to even control his cabinet and his failure to more quickly
address the actions of a coalition minister, accused of defrauding the country up to $40bn
in a telecom licence scam, led to him being accused of further weakness.
Those who defend the prime minister say he is caught in a difficult position. Against a
challenging international climate, he has sought to continue his party's policies of reform
while also trying to provide for the country's poor, overseeing employment, education and
health programmes. They point out that for all the stories of "Shining India" that adorned
magazines such as Time during the first half of the decade, the country still has hundreds
of millions of people living in utter poverty. "The criticism of him in the media comes from
one section of society, the business community, which thinks it should be given
everything," said one former official who has worked closely with Mr Singh.
If anyone is to salvage Mr Singh's reputation in the two years he likely has remaining, it
can only be him. While he may unfairly have become the target for criticism of an entire
administration, it is he who needs to do something if he wants to secure a favourable
place in history. He says he intends to do so. As Foreign Policy magazine reported, on 27
June, a day after he handed himself the finance ministry portfolio following the resignation
of Mr Mukherjee, who is now the party's candidate for head of state, Mr Singh's official
Twitter feed claimed he intended to "revive the animal spirit in the country's economy".
The monsoon rains have finally arrived in Delhi, creating a sticky backdrop to this latest
political heat. In the cool interior of the red sandstone office on Raisina Hill, Mr Singh is
said to feel that the US magazine article was "unfair". Aides have declined to comment
directly on the controversy but a spokesman, Pankaj Pachauri, said the prime minister was
confident he could turn the situation around. "There is unanimity that for the inclusion of
India's poor in development, you have to have growth," he said. "How to achieve that
growth is the challenge."
The Path To Power
1982 Appointed Governor of the Reserve Bank of India, holding the post until 1985. Later becomes the deputy chairman of the Planning Commission of India.
1991 Elected to the upper house of parliament. Named Finance Minister by Prime Minister
PV Narasimha Rao.
1998 Leader of the opposition in the upper house of parliament while the Bharatiya
Janata Party holds office.
2004 The United Progressive Alliance coalition – formed after the 2004 elections and led
by the Congress party – nominates Dr Singh as Prime Minister.
_the Independent, UK