ELECTIONS

'Mr Clean' starts 2nd innings

Source:PTI
May 20, 2004 01:04 IST

Soft-spoken and mild-mannered economist-turned-politician Manmohan Singh shot into prominence after he steered the economy from the pits of a severe balance of payments crisis and saved the country from the verge of defaulting its external payments in 1991.    

Known as 'Mr Clean' and a gentleman politician, the Oxford-Cambridge educated architect of the country's economic reforms changed the face of India in the global comity of nations during the five years he held the post of Finance Minister from 1991-96.

Born in Gah (West Punjab), now in Pakistan, on September 26, 1932, Singh, as finance minister in the Narasimha Rao's Congress government had changed the fundamental way the corporate India thinks and with it the life of millions of middle-class Indians by liberalising the economy.

An unassuming personality, Singh has held several positions, including Chief Economic Adviser and Finance Secretary before becoming Governor of Reserve Bank and then Deputy Chairman of Planning Commission and UGC Chairman in 1980s and early nineties.

Singh, who unshackled the country from the bureaucratic controls and licence-permit raj, had taken the economy from the brink of bankruptcy to a high growth path of 6-7 per cent during his five-year stint at North Block.

The 72-year-old Rajya Sabha member from Assam has been welcomed by trade and industry as an instant choice for the coveted post because of his impeccable credentials, bureaucratic experience and intimate knowledge of international economics.

Singh, who is universally well regarded, was educated at Punjab University first and then in Oxford and Cambridge. His potential was evident when he won Cambridge's prestigious Adam Smith prize in 1956.    

The following year, he returned to India as a university lecturer and for the next nine years remained at Punjab University before being posted for international duty with UNCTAD (1966-69).  

He then joined the Delhi School of Economics as a professor. Two years later, his academic career was cut short and he joined the government to serve in various capacities.

In all these positions, those who worked with him have nothing but admiration for Singh's talent and conduct.     

Hard working, meticulous, charming and 'such a nice man', they all said about Singh.

Despite being 'unfailingly polite', Singh is known for his hard and bold economic decisions. As Finance Minister, before he presented his historic budget in 1994, Singh went to the then Prime Minister Narasimha Rao and told him that India needed a strong vision to take it forward.

"I said to him (Rao) it is possible that we will still collapse. But there is a chance that if we take bold measures, we may turn around and that I said is an opportunity. We must convert this crisis into an opportunity to build a new India, to do things which many people before us had thought should be done but somehow never done," Singh had said.

Rao had backed Singh to the hilt and India embarked on a path of reforms. And government that year entered into an understanding with RBI to deny itself the right to draw on the RBI to fund its deficit.

This put an end to unlimited monetisation of fiscal deficit, which was considered to be a historic move to improve the financial health of the country.

Looking back, Singh says when he stood up in Parliament stating the case for reforms, his argument was that in the midst of an unprecedented crisis, it was time to think big rather than tighten the belt.

"We could, in a traditional way, tighten our belt and we did that, tighten and tighten. But persistence on that path would have led to more misery, more unemployment," Singh had said.

He had suggested an 'alternate path' -- stabilisation plus a credible structural adjustment programme -- that would shorten the period of misery.     

"It would release the innovative spirit, entrepreneurial spirit, which was always there in India in such a manner that our economy would grow at a much faster pace, sooner than most people believed. That's exactly what happened," Singh had said recalling the old days.

For what Singh has done as finance minister, there are as many critics as admirers. Thrice he had submitted his resignation during his five-year tenure but the then prime minister (Rao) did not allow him to quit.

First time was when Congress Party was agitated by the hike in fertiliser prices; the second time when the financial scam involving big-bull Harshad Mehta came to light; and lastly when the Joint Parliamentary Party submitted its report to criticise some Union ministers and his ministry on the scam.

"In fact, I was the one who discovered the scam and took Parliament into confidence," Singh had said at that time.

Singh said, "The scam had started in 1988 and I did not know about it till 1991-02. I was too busy pulling the country out of the quagmire of bankruptcy in which it was stuck. Forex reserves were down to 1.0 billion dollars, industrial production to 2.2 per cent and the overall growth rate to less than 1.0 per cent."

With pride, he had said the forex reserves have gone up manifold, growth rate averaged 6.0 per cent, inflation down to 4.5 per cent and industrial production was up by 12 per cent and economy was in a fair shape before the Congress government fell in 1996.

"Even if they were to spoil things, they still have 7-8 months to mess up," he had said when the United Front government assumed office in 1996.

Fortunately, the reform foundation that Singh had laid had only taken the country forward and was pursued by the subsequent United Front and NDA governments.

Unlike the crisis days of 1991, Singh would be a proud man as he takes over as prime minister with the country's GDP growth clocking 8.1 per cent, forex reserves comfortable at 118 billion dollars with exports at over 60 billion dollars, farm output at record high of 212 million tonnes and inflation at 5.0 per cent.

Source: PTI
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