Once considered as the most honest politician and a reliable economist, Prime Minister Manmohan Singh’s image has tarnished over past few years. The scams which overshadowed the UPA-II government, questions the potential of PM Manmohan Singh’s leadership. With slowdown in the growth rate and continually falling rupee, India’s economic future remains uncertain. But the question remains, Is PM Manmohan Singh a failed economist? Lets get ourselves familiar with our Prime Minister.
Manmohan Singh born in Gah, now in Punjab, Pakistan, moved to Indiaafter partition in 1947. Singh obtained his doctrate in Economics from Oxford University. He began his career when Lalit Narayan Mishra hired him as an advisor in the Ministry of Foreign Trade. After then, Singh held position of many key posts such as, Chief Economic Advisor(1972-76), Reserve Bank Governor(1982-85) and Planning Commission head(1985-87). But it was in 1991 when Singh was recognised as a great economist. Indiawas in deep economic crisis during the Indian National Congress(INC) rule. Then Prime Minsiter P.V. Narsimha Rao appointed Singh as the Finance Minister. At that time, India’s fiscal deficit was close to 8.5 percent of the gross domestic product, the balance of payments deficit was huge and the current account deficit was close to 3.5 percent of India’s GDP. At this point India sought help from International Monetary Fund (IMF). IMF imposed several conditions. IMF-dictated policy meant that the Licence Raj had to be dismantled, and India’s attempt at a state-controlled economy had to end. Singh then opened India’s economy to Foreign Direct Investment and privatised many public sectors. Although there were many protests regarding the economic reforms but Singh was adamant and carried these reforms against all odds. These reforms led to an upsurge in the economic growth of Indiaand enhanced Singh’s reputation globally as a leading reform-minded economist.
Today when this economist, wants to carry out similar reforms as 1991, he is facing huge criticism not from the opposition but also from his party’s allies. Congress has witnessed huge blows with scams like 2G- Spectrum, Adarsh Society Scam, CWG Scam and the recent one; the Coalgate scam. With an economic growth of 4.9 percent and a falling rupee value against dollar, an economic slowdown is forecasted in India. PM Manmohan Singh’s recent changes; subsidy on LPG cylinders, hike in diesel prices and the much controversial FDI in multi-brand retail has recieved a huge flak from the opposition and general public.
After Trinamool Congress withdrew its support to the Congress led UPA government, Singh addressed the nation to make the general public understand the crux of the reforms. In his address to the nation, Singh strongly criticised the thinking that FDI in multi-brand retail will prove harmful for small traders. Instead it will help small traders by way of greater market access and higher profit margins. FDI will promote technological advancement and enhance productivity which will lead to greater cash inflows and thus will make Indiaeconomically stable. Farmers will get better price of their produce and consumers will derive value of their money. Singh said that people of India should not be in any kind of fear and should not believe false statements. He gave the example of 1991 reforms and said that these reforms are for the interest of the people of India. He assured that FDI in multi-brand retail will open up new jobs for people. It is estimated that FDI in retail can generate 4 million direct jobs and about 5 to 6 million indirect jobs within a span of 10 years. He also said that there is no compulsion on the imposition of FDI in every state. State governments can refuse from this but should not provoke other states to oppose FDI in retail. Justifying the hike in diesel prices, Singh said that with the increase in the petroleum prices all over the world, it became indispensable to avoid the hike in diesel prices. He also said that there was a need to hike Rs. 17 per litre, but we cut it to only Rs. 5 per litre. He said that most of the diesel is used by SUVs and factories. Should government run large fiscal deficits to subsidise them? He said that taxes on petrol were cut by Rs. 5 per litre to prevent a rise in petrol prices. On the decision to put a cap of 6 subsidised cylinders per year, Singh said, “Almost half of our people, who need our help the most, actually use only 6 cylinders or less. We have ensured they are not affected.” “We did not touch the price of kerosene which is consumed by the poor,” he said. “The total subsidy on petroleum products will still be Rs.160 thousand crore. This is more than what we spend on health and education together. We held back from raising prices further because I hoped that oil prices would decline,” he said.
Now we, the people of India, need to do is to have faith in this man who once saved our economy from slowdown. This visionary, no matter how much he is criticised, has always worked for the betterment of the Indian economy. When the global economy is facing a huge slowdown with The United States , Europe and Chinain economic downturn, India has not been hugely affected. These hard reforms will take us to new heights and ensure that India come out as an emerging world economy.