'Manmohan legacy of growth stunted by price rise, graft'

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Gyanendra Kumar Keshri | 01 Apr, 2014
As Manmohan Singh steps down less than two months from now as the prime minister of Asia's third-largest economy, he will be credited for ushering the fastest-ever growth, but his legacy will also be mired somewhat by serious allegations of graft against his government and sharp rise in prices, opinion makers maintain.

The 81-year-old soft-spoken economist, who initiated India's economic liberalisation 22 years ago as finance minister, is now criticised for failing to push forward the reform process and in controlling pervasive corruption and inflation.

These, the opinion makers felt, overshadows the unprecedented average annual growth of 7.5 percent logged during his two terms heading the United Progressive Alliance (UPA) government against 5.9 percent of the previous National Democratic Alliance (NDA) regime.

"Had Manmohan Singh taken decisive action on corruption in the 2G telecom spectrum case, allocation of coal blocks and the Commonwealth Games scam, history would have treated him differently," Arun Jaitely, leader of the opposition in the Rajya Sabha, told IANS.

This apart, his hesitation in taking decisive action against some cabinet colleagues, as also in communicating to the people at large also cloud what has otherwise been a dream career run for the Oxford-educated economist, the analysts said.

"A good man but weak prime minister." This has been the general description of Manmohan Singh that L.K. Advani, former deputy prime minister and senior leader of the Bharatiya Janapa Party (BJP), has often used.

Speaking to IANS, Surjit S. Bhalla, the chairman of Oxus Research and Investments and a noted economist, said the uncontrolled price rise that one has seen during the past few years is also a big drag on the performance of the Manmohan Singh government.

"Inflation had been high and low, no doubt. But it has consistently been in the double-digits levels for the past six years. This has never happened before," said Bhalla and pointed out that the average retail inflation has been over 10 percent since 2008.

Finance Minister P. Chidambaram, who has also held the key portfolio of home ministry during the two terms under Manmohan Singh, says the sustenance of high economic growth and the uplift of some 140 million people out of poverty are major achievements.

But that, the analysts maintain, is just not enough.

"It was clearly a lost opportunity for India during these 10 years," said Rajiv Kumar, a senior fellow at the New Delhi-based think-tank, Centre for Policy Research, commenting on Singh's legacy as prime minister, especially on the economic front.

"The prime minister's inability to assert and push forward policy reforms were reflected in his comments from time to time," added Kumar, who was also secretary general of top industry body Federation of Indian Chambers of Commerce and Industry (Ficci).

Kumar sought to draw attention to the recent press conference and a rare, third one that Manmohan Singh addressed in 10 years, in which he sought to defend himself by saying he had insisted that coal and spectrum auctions must be "equitable" and "transparent".

The prime minister had said it was he who wanted transparency.

"I feel somewhat sad because I was the one who insisted that spectrum allocation should be transparent, it should be fair, it should be equitable. I was the one who insisted that coal blocks should be allocated on the basis of auctions," he had said.

But Kumar maintained that the same comments in defence made by the prime minister sound different when seen in another context. "Such comments show that he was not in control. If he wanted coal blocks auctioned, they should have been auctioned," Kumar said.

Manmohan Singh also conceded that his government did not succeed in creating enough jobs and controlling price rise. These two issues, the analysts maintain, are two major areas that directly affect the common people the most, and ought to have been addressed.

Another area where the Manmohan Singh government has come under criticism from analysts is subsidies. A whopping Rs.11 trillion ($183.3 billion) was spent on doles toward fuel, fertilizer and food. The money, they said, could have been used productively.

The prime minister has argued such spending helped minimise the impact of price rise on the common people. But had this money been spent on asset creation and infrastructure, the impact on growth and job creation would have been much better.

A study by another leading industry body, the Confederation of Indian Industry (CII), throws more light on this. It said there was hardly any addition to the output of the manufacturing sector.

In fact, it pointed to some worrying aspects in the economy like the fall in the share of manufacturing in India's gross domestic product (GDP) to a 10-year low of 15 percent in 2013.

"The manufacturing sector is a core enabler for job-creation. A healthy macro-economic environment is a precondition for the expansion of businesses as also to encourage new entrepreneurs," said Sidharth Birla, president of industry body FICCI.

"We certainly expected more action in these areas," Birla said, adding sound governance, policy clarity and effective implementation of these were all required to achieve the desired outcomes in terms of growth.

Economic expansion has undoubtedly been faster during Manmohan Singh's tenure. Average growth in first five years was 8.4 percent. It fell sharply in the first four years of the second term. Yet, the 10-year record has been impressive at 7.5 percent.

But as argued by Manmohan Singh's close friend of many decades, Nobel laureate Amartya Sen, growth alone is not an enabler enough to end hunger and ensure inclusion -- the main two planks on which his grand old party got the people's mandate for two terms.

* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times. Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in