Home > Budget 2019 > Opinion > Opinion | Govt will do well to draw lessons from the Manmohan playbook

Towards the end of his tenure as prime minister, the self-effacing and humble Manmohan Singh displayed a rare indulgence to talk about himself: “History will be kinder to me, than the media." Barely five years since the end of his 10-year tenure as prime minister, Singh is being sorely missed and the murmurs that India needs a Singh-like finance minister are turning into a chorus. As the Indian economy goes through its worst phase in the last four decades, the government will do well to draw lessons from the stalwart’s playbook.

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For starters, the Union government needs to hire the right people for the right job and trust them to do their work. In the last five years, India has witnessed a virtual exodus of talented technocrats who had nothing but the best interests of India in their hearts. Worse, they have been replaced with incompetent leaders who lack vision.

In terms of economic policy, as someone who has had the honour of seeing him work, I knew nothing disturbed Singh more than inflation, and he had zero patience for the “trickle down model of growth". One doubts if the cut in corporate tax rates would have any meaningful impact. As a member of the Goods and Services Tax (GST) Council, I can vouch that the growth in GST collections will be less than the growth in GDP. The size of the cumulative fiscal deficits of states and the Centre leave little room for the Union government to step up expenditure. Flagging consumption levels, the crisis in real estate, automobile, telecom, fast-moving consumer goods, all point to a rather bleaker future. In such a situation, the solution lies in putting money in the hands of the poor and the needy—think Mahatma Gandhi National Rural Employment Guarantee Act , direct transfer of agriculture subsidies, investment in agriculture supply chain and food processing.

The telecom sector’s multiple crises—some genuine (Vodafone) and some fictional (spectrum auction losses, anyone?), were perhaps the precursors to the economy losing steam in the latter half of the United Progressive Alliance’s second term. Further, the government seems to derive perverse pleasure in randomly shutting internet access, causing more losses to telecom service providers. Estimates suggest that India has almost lost $1.3 billion because of internet shutdowns in 2019. The government has to focus on genuine job creation, which would mean reforming labour laws, providing succour to small and medium industries annihilated by demonetization, investing in agriculture, capitalizing public sector banks, and partnering with states to simplify GST and in reviving investments.

However, for all this to happen and for businesses to feel confident to invest, the government has to win back the citizen’s trust, which it is dissipating quickly. India’s global image has taken a serious beating and this could have repercussions on foreign direct investment inflows. Finally, alienating the youth, in the world’s youngest country, is a recipe for disaster.

The brute parliamentary majority that Modi’s government enjoys should not lull it into a sense of complacency. World history is replete with examples that, much like in Greek tragedies, hubris of democratic leaders inevitably results in their nemesis.

Manpreet Singh Badal is minister for finance, planning and programme implementation in the Punjab government.

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