Economic turmoil: is MMS the right man to fall back on?

The idea of PM becoming own FM isn’t new, but the pitfalls are

rohit

Rohit Bansal | June 27, 2012




If only the London Olympics had an event around verbal calisthenics, our local Humphrey Appleby’s might have won all three medals.

“As advised the president of India has directed that the work of the ministry of finance will be looked after by the prime minister,” the presidential communiqué informs us.

It could well have said that the outgoing president, in between settling the dues with Agarwal Packers, has directed what she was told to do by the prime minister that, with due approval of Sonia Gandhi, he’d now like to replace her likely successor Pranab Mukherjee and anoint his own good self there!

Phew! For someone with only grudging respect for Manmohan Singh the PM, I fear he has walked into the biggest pitfall of his life. It’s probably too much cricket he watches, he’s trying to be Mahendra Singh Dhoni in the World Cup, steering India out of trouble, when all others are floundering. Remember, even for Dhoni at his prime, it works only sometimes. Didn’t he fall on his face a few months later, trying to emulate himself in the Indian Premier League Final?

Surely, a cricketing imagery has its limitations. So, let’s deep dive into the political economy itself. Three quick points to argue why PM-the FM will be a spectacular failure:

First, Manmohan Singh is never a man who’ll take tough decisions (unless it’s a word of honour on the Indo-US civil nuclear deal). The economic situation today required the FM to be the fall guy, someone who negotiates hard with the states, hardly the sagacious fence sitter who awaits a message from Pulok Chatterjee about what Sonia Gandhi wants him to do.

Singh’s success as FM (1991-96, by the way he also took charge in November 2008 until January 2009) has been interpreted as his own. This is a fallacy. For two reasons. First, the FM did what he did only because the Shylocks at IMF left India with no option but to open her doors. Second, and perhaps equally important, a now forgotten man called PV Narasimha Rao, was the CEO of the nation. It is under Rao’s protective shield that the CFO, a political lightweight, occupied the archlights and arrogated for himself the title, “Father of Indian Reforms.” Thanks to a generation of journalistic interpolation, some in deference to the Gandhi family’s allergy to Rao, the CEO’s role (as also principal secretary AN Verma’s) in Singh’s success never got its due.

It isn’t for this columnist to try and unturn this injustice, but suffice to say, a successful No.2 in history needn’t be a great No.1. Singh has proved this spectacularly. Similarly, optimism about an indifferent No.1, a compulsive note-taker, turning into his own No.2 is fraught with fault lines.

Particularly so because the Empress of India has no background in economics and will have very little guidance to give her faithful PM-turned-FM.

My second worry against Singh taking charge of finance is the message that he doesn’t have enough talent in his team. If the prime minister of India has to step into the FM’s shoes, it shows there aren’t enough men around and, worse still, that he doesn’t have the guts to annoy any of the aspirants. It’s a bit like a meek captain of a fielding side saying, “I can’t decide among the big guys, so let me chance my arm, myself…after all I was a bowling great 21 years back.”

Indeed, age and energy aren’t on Manmohan Singh’s side. He’ll be eighty in a few months. With no stomach to identify a No.2, would the task of replacing Pranab also entail chairing the aspiring president’s 12 eGOMs (empowered group of ministers) plus the 12 GOMs that Mukherjee headed out of 27? Remember, Singh is already the minister for space, atomic energy, planning, and personnel, public grievances and pensions. The eGOMs and GOMs were Singh’s smart ploy to maintain arm’s length and dump huge responsibility on Pranab leaving him with a designated Embraer and little time to breath, let alone confabulate or sulk. What happens to that arrangement?

Related to that, a third point. What happens to the hard nuts to crack, say, FDI in retail? Shashi Tharoor, the Congress’s poster boy on twitter, has said in a striking claim to a Network 18 publication on Tuesday that “a shrewd assessment of the political realities and the economic needs demonstrates that FDI in retail is something that the government is convinced is good for the nation and it will certainly send a very positive signal to investors outside…The irony is that it doesn’t actually need parliamentary approval. It was an administrative governmental decision to be made, but because it happened to be announced during a parliament session, it became impossible to go ahead with. But I think, next time it will be announced, and it will be one day, it will be after the political homework has been done and the numbers have been added up. These are some of the things that have to be sorted out.”

Contradictions between Tharoor-like pro-changers and woolly-eyed leftists in Sonia Gandhi’s National Advisory Council, indeed force a Hobson’s choice on the FM and his commerce and industry counterpart.

Singh government’s decision-making has indeed slowed down. Blame it on pessimism and the current body of evidence in the country on corruption in government - the pessimism indeed is a bit exaggerated, just as the earlier optimism our tryst with superpower status was overblown - decision-making has indeed become unnecessarily cautious. Even though PM is the FM now, no civil servant or even a minister wants to take decisions that can even remotely be questioned on grounds of impropriety some months/years later, even if they feel that they are doing the right thing for the country.

Does Singh have the stamina left to do direct business with FMs of India’s quarrelling states that have already pushed the centre to the periphery?

Can he even begin to revamp processes where, for instance, an empowered group of secretaries is created to do the execution (we still don’t have an eCOS, each secretary happily lobs the ball in the other one’s court and then hankers for a regulator’s sinecure). It’s a no brainer that only joint responsibility can deliver critical infrastructure projects in the country. Without an eCOS, the recent “investment tracking system” for private-sector projects above Rs 1,000 crore will remain a half-way house.

What if Singh doesn’t hold on to the FM’s job? He’s then left to sell to his boss the idea of C Rangarajan or Montek Singh Ahluwalia, both political lightweights. It’s more like him to let Sonia toss the coin between P Chidamabaram, Jairam Ramesh, Anand Sharma, Kapil Sibal, Sushil Shinde, Pawan Bansal, and Kamal Nath.

In brief, there’s overarching merit in letting go the CFO’s job. If he did so, Singh can continue having his regulation siesta and, above those pleasures, not retire as an unsuccessful FM.

**Tail Piece: Jawaharlal Nehru became his own FM in 1958-59. Indira Gandhi took charge of the ministry in 1970-71. Rajiv Gandhi did so between January and July 1987.

 

 


 

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