'Manmohan's civility was seen as weakness'

December 27, 2024 12:48

Arvind Mayaram, former Finance Secretary, Ministry of Finance of Government of India and former principal economic advisor to the Government of Rajasthan speaks to Syed Firdaus Ashraf/Rediff.com on working with Dr Manmohan Singh.

"Dr Manmohan Singh was the finance minister when my appointment was done in 2012. He selected me for the post (Economic Affairs Secretary) but when I joined, the the finance ministry was given to P Chidambaram. (Later in April 2014, Arvind Mayaram became Finance Secretary).

I found Dr Singh to be a prime minister who had immense capacity to listen. For instance, when we used to discuss the Budget 2013. It was a very difficult time for us as the economy had tanked. If you recall in 2012-13, the GDP growth of economy had gone down to 5.1 per cent after growing consistently to 8 per cent till 2011.

"There were other issues like fiscal deficit was high and the risk of credit rating downgrading. The rupee had tanked from Rs 59 to Rs 68 to a dollar. This was the time when I joined the team of the finance ministry.

"Whenever we went to Dr Singh I always found that he was a very patient listener; he was never impatient. I never heard him say, 'why are you saying this? I already know this', which he should have, considering he was an economist and the finance minister of India.

"When we used to speak he used to listen to us very carefully and even if your argument was contrary to him he never felt annoyed. He always used to say, 'I think you have a point of view but this maybe a better point of view. He was persuasive.

"Dr Singh brought a sense of confidence when a different crises blew one after another. He had a very steady hand and even in a big storm we never felt that we were without direction. He was not whimsical and he thought through things and give directions. His directions were never diktats or commands. They were always like a suggestion and those suggestions were in a form that became an order.

"The entire middle class today which is 400 million, is Dr Manmohan Singh's making. Before 1990 we had a very small middle class in India and growth was very slow. People remained in poverty for very long. During his rule as Prime Minister of India (2004-14) he got 270 million people (27 crore) people out of poverty. This according to World Bank is the fastest compression of poverty anywhere in the world in world history.

"We keep talking of (his achievement as finance minister) 1990-95, the liberalization period but what happened between 2004-14 during his tenure as Prime Minister of India was even more dramatic.

"This was the second revolution as he brought 27 crore people out of poverty (2004-14). The coming out of 27 crore people out so quickly became a crisis of expectation for his government. Once, you are out of poverty you want more and quickly. And this period for consolidation was not available to him. But the fact that so many people came out of poverty is historical.

"His scheme, the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) helped lift people out of poverty but at the same time Indian economy was growing at 8 per cent per annum till 2010-11. This was the fastest ever growth of the Indian economy. There was rapid growth and jobs that were being created.

"What MNREGA did was that it was not providing jobs but it gave a benchmark for the semi and unskilled rural poor to be able to get better wages. This happened in sectors even outside agriculture like construction industry. This was also the reason for inflation because demand side got major push but then the supply side needed time to catch up.

"It was not given to him because unfortunately fictitious scam like 2G and CAG report which pulled numbers out of the hat and the media played it up. The government then had no time to consolidate. They did not have the bandwidth to consolidate the gains of demand push that had come. There was a huge growing demand but the supply side was not catching up.

"If he had got another five years we would have seen that consolidation. Today, we are in imminent danger of middle income trap. Now, the whole Indian economy is designed in a manner where monopolies are growing and predicated for only 300-400 million people. All the production and services are happening for them. Gig services, tourism, entertainment or hospitality is for middle class of 300-400 million people thus leaving out other 800 million people.

"He said history will remember him kindly, but I say history will remember him with lot of gratitude. His critics and opponents called him puppet Prime Minister but you have got to understand he was not a muscular Prime Minister.

"What the late United States President, John F Kennedy said described Dr Manmohan Singh perfectly. Kennedy said, 'Civility is not a sign of weakness'.

"In India unfortunately we mistake civility to be sign of weakness."

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'Manmohan's civility was seen as weakness'

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