How does one know that India does not have a full-time finance minister? More than any financial or economic indicators, it’s the cacophony of voices emanating from the government that shows there is no one in charge of this sphere. Confusing statements on stimulus packages to revive the economy are a good example.
On Wednesday, Planning Commission deputy chairman Montek Singh Ahluwalia said there would be no more stimulus packages. On Tuesday, he had said there would be no more tax cuts. A day earlier, on Monday, commerce minister Kamal Nath had said that government would continue to inject funds and provide a stimulus to the economy. Last week, Nath had stated that government would “top up” stimulus packages provided to industry. There have been occasions when home minister P. Chidambaram has issued statements on the subject. For the record: Prime Minister Manmohan Singh also holds the finance portfolio, but he has been curiously silent amid the competitive rush to make statements.
Indian firms have in recent years found good business, both at home and in foreign markets. Their growth took place in a placid financial and economic climate. That situation has changed drastically in the last 12 months. This has given way to uncertainty of the kind that Indian firms are in no position to cope with. The situation requires a steadying hand for businesses and firms. Yet, India has no finance minister.
What explains this situation? Does India lack talent that a finance minister cannot be appointed? Or is it that with elections around the corner, no one cares? There is no dearth of bright economists with the requisite administrative experience for the job (C. Rangarajan is one good example). If anything, it’s the lack of political will that prevents the Prime Minister or the ruling coalition from taking action.
With such inaction, the present government may be making life difficult for the next one. Between the end of its tenure and coming in of the next government, any number of things can go wrong. The lethargy of one government should not result in expensive mistakes, ones that have to be borne by the entire country.
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