With Prime Minister Manmohan Singh committing his government to ushering a new wave of economic reforms – akin to what he had unveiled as finance minister 20 years ago – the spotlight ought to be on the team he now has at his disposal to realise his latest dream. For, it is the quality and the effectiveness of his team of senior officials that will largely determine the degree of success in implementing the new reforms programme.
Manmohan Singh’s success in reforming the economy with a slew of measures in 1991 was possible for three reasons. One, his commitment to the idea of reforms and his ability to empathise with a political system that could withstand only a slow and steady pace of change. Two, he had the unqualified backing of then prime minister P V Narasimha Rao while bringing about the major changes, though with some compromises. And three, he had a team of top-class civil servants in the finance ministry, and even in other economic ministries, who were not only competent, but were ideologically in complete agreement with the need for reforms.
Today, the first two factors that helped Singh achieve success in 1991 remain. His commitment to a second round of reforms seems as strong as it was 20 years ago. Since he is now the prime minister, he does not have to worry about the backing of his boss, though many political analysts believe that he may not always enjoy the kind of support he needs for reforms from Congress president Sonia Gandhi. However, the equations are different today and Gandhi needs Singh as much as the latter needs the former. Moreover, there is now greater political support for reforms.
In 1991, the Union Cabinet was said to have only two-and-a-half reform-minded ministers. The reference was to Manmohan Singh and P Chidambaram, who was then the commerce minister. Nobody really knew who the half-reformer minister was or whether it was a way of suggesting the limited support reforms enjoyed at the ministerial level. Today, by consensus, the Union Cabinet has many more ministers who would swear by economic reforms, reflecting a major change in the mindset of the ruling party politicians. Even the opposition parties have veered round to the view that they may quibble over the pace of reforms, but on the broad direction of reforms, they have no difference of opinion.
Yet, it’s ironic that in spite of greater political support to reforms, the Manmohan Singh government’s record on this front, particularly in its second tenure, is average. Even as a series of corruption charges against the government has bogged down Singh, the visible lack of reforms has created many more hurdles in the Indian economy’s march towards achieving sustained high growth in the coming years. Apart from Chidambaram, who was one of the original reformers in 1991, Singh now has reform-minded ministers in Pranab Mukherjee, Kamal Nath, Kapil Sibal, Jairam Ramesh, to name only a few.
However, as 1991 showed it so clearly, the presence of more reform-minded ministers is not the only necessary element to ensure the success of reforms. What is equally critical for giving the economy a big reforms push is to have in place a team of able, enterprising and reform-minded top bureaucrats in charge of key ministries at the Centre. The finance ministry under Singh had the good fortune of having several senior and even middle-rung officers, who made all the difference.
Montek Singh Ahluwalia, Shankar N Acharya, Ashok V Desai (though for a short period), K P Geethakrishnan and M R Sivaraman were there to give shape to the idea of early economic reforms initiated by Manmohan Singh. At a step or two below, there were R Venugopal Reddy, N K Singh and Duvvuri Subbarao. Reddy later moved to the commerce ministry before joining the Reserve Bank of India (RBI) as deputy governor and then, after a short stint at the International Monetary Fund, became the head of the central bank. Singh later became the revenue secretary. Subbarao became the finance secretary and is now the RBI governor. Manmohan Singh’s personal secretary at the time, Rahul Khullar, is now around and heads the commerce ministry.
The point is that most officials who made a difference then by making a success of reforms have proved to be durable assets over the last two decades in different capacities and under different governments. They are still the ones who make their contributions to better governance through either being part of the government or from outside. That is proof of how good the team of reforms Manmohan Singh had put together in the 1990s.
The big challenge that Singh faces today is whether he can put together a similarly qualified, competent and committed team of senior officials who can take charge of the situation. That must be a big concern. It is a not just a comment on the quality of officers that the Indian Administrative Services system has been churning out of late, but also on Singh’s own failure in revamping the civil services.