Opinion | Manmohan Singh: The Man Who Dared To Ditch Socialist Dogmas
Singh had the boldness and foresight to discard Nehruvian dogmas and embrace the true philosophy of a free economy
There is an adjective that has come to define former Prime Minister Manmohan Singh—‘self-effacing’. Both during his lifetime and in most of his obituaries, this term has been used to describe his gentle and unassuming persona. Interestingly, self-effacement was also a characteristic of Victor Hugo, whom Singh famously quoted in his maiden speech as finance minister in 1991: “No power on Earth can stop an idea whose time has come."
The idea of the free market was already a couple of centuries old when Singh embraced it; Adam Smith had most convincingly articulated it in The Wealth of Nations in 1776. As a prominent economist, Singh could not have been unaware of Smith’s wisdom. His greatness lay in adopting this idea and implementing it in a country whose economy, polity, and—worst of all—mindset had become hopelessly accustomed to the myriad distortions of socialism. By quoting Victor Hugo, Singh downplayed the role his own free will played in recognising the validity and efficacy of an open economy.
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Singh will be remembered for his moral courage and intellectual integrity. Millennials may find it difficult to comprehend the climate of opinion when he delivered that speech—the most consequential budget speech ever made in Independent India. At that time, the Left was considered always right, and the Right always wrong. This was not limited to the political or cultural Right, represented by the RSS and BJP; even the economic Right was relentlessly vilified by intellectuals, who were mostly Left-leaning. Anyone—even members of the English-speaking elite—who expressed doubts about the efficacy of socialism was immediately denounced as a ‘running dog of capitalism,’ ‘a stooge of capitalists,’ and similar pejoratives.
Today, it is unremarkable for politicians to promise, or opinion-makers to support, economic reforms; 33 years ago, however, such views were considered blasphemous—with grave consequences. Singh chose the nobler path: to take up arms against the pinkish political and intellectual elites of that era rather than allow the nation to endure the slings and arrows of outrageous socialist policies.
His decision was also remarkable for its extraordinary intellectual integrity, as he had been an integral part of the pre-1991 policy-making apparatus that he now sought to dismantle. It takes immense conviction to discard something one helped build, especially when the existing structure is dangerously unstable. In this case, the structure was not physical but the policy framework.
A policy framework is founded on principles and concepts; before 1991, these were deeply rooted in Nehruvian socialism. Singh had the boldness and foresight to discard Nehruvian dogmas and embrace the true philosophy of a free economy.
Before he became finance minister in 1991, Singh’s illustrious career was the envy of any economist. He taught at the prestigious Delhi School of Economics, served as an economic adviser in the Commerce Ministry, held the position of chief economic adviser to the government, was a member and later deputy chairman of the Planning Commission, and served as governor of the Reserve Bank of India. Singh was undoubtedly a central figure in India’s socialist economic framework. What made his career truly fascinating was the intellectual dexterity and pragmatism he demonstrated in dismantling much of this very system.
When Singh assumed the role of finance minister, India’s foreign exchange reserves were rapidly depleting, and the country was on the brink of default; the exchequer was empty. Fortunately, at that critical juncture, two great leaders were at the helm—the then-prime minister PV Narasimha Rao and Singh. Together, they liberalised the economy by implementing momentous structural reforms, including inviting foreign investment, reducing tariffs, dismantling the license-permit raj, et al—thus averting an economic catastrophe.
Economic reforms unleashed entrepreneurship, freeing the animal spirits that have achieved remarkable results over the past 33 years. India’s share in global GDP has risen from around 1 per cent in 1991 to 3.4 per cent today. With the country making significant strides in sectors such as information technology, it has emerged as a global economic player. Foreign exchange reserves now exceed $562 billion. Prosperity has increased phenomenally across all classes, and extreme poverty has declined drastically; some economists even claim it has been eradicated entirely. Singh played a pivotal role in ushering in such glad tidings.
While Singh was undoubtedly India’s greatest finance minister, he did not exactly shine as prime minister (2004-14). The economic reform agenda faltered during his leadership. This was primarily due to the dual power structure within the Congress-led United Progressive Alliance (UPA). Sonia Gandhi, UPA chairperson, wielded considerable influence over policy decisions—and she was Left-leaning. The dual power structure was also largely responsible for the allegations of corruption that were hurled at his government in the second term (2009-14).
It can, however, be said in Singh’s favour that he remained a somewhat stabilising force in the UPA regime, ensuring that the government’s economic policies did not veer excessively towards populism. Without his presence, it is arguable that the government might have pursued even more fiscally unsustainable measures.
Further, under his leadership during the global financial crisis of 2008-09, India did quite well to navigate the downturn with resilience, aided by prudent monetary and fiscal measures. Further, the signing of the Indo-US civil nuclear deal in 2009 was mainly because of his unflinching stand over the issue.
On the whole, Singh did a lot of good for the country. He was right: history will indeed be kinder to him.
The author is a freelance journalist. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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