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History Will Not Be Kind to Dr Manmohan Singh

Author: Sucheta Dalal
Publication: Moneylife.in
Date: March 16, 2015
URL:     http://www.moneylife.in/article/history-will-not-be-kind-to-dr-manmohan-singh/40812.html

He had two rare opportunities that any person could wish for, to change India; but history will remember that he presided over the most corrupt government in independent India
 At his last press conference in January 2014, Dr Manmohan Singh had, almost wistfully, expressed the view that “history will judge me more kindly.” That hope seems completely dashed by two events.
 The first two rounds of e-auctions for the coal blocks, cancelled by a Supreme Court order, have fetched cumulative bids of over Rs2 lakh crore for 32 producing blocks. The bids vindicate and surpass the comptroller and auditor general’s (CAG’s) three-year-old report that estimated a ‘notional’ loss of Rs1.86 lakh crore to the exchequer due to arbitrary policies and the improper allocation of coal blocks.
 Vinod Rai, who was the then CAG, was severely maligned by the United Progressive Alliance (UPA) government, with former minister Kapil Sibal claiming that there was ‘zero’ loss. Today, the UPA government headed by Dr Manmohan Singh stands exposed and it is now an established fact that he stood by and allowed the plunder of national resources, even if he did not touch a penny of the loot. The loss was not merely ‘notional’. Most of the coal mine allottees quickly availed bank loans. Consequently, the banking system has a massive exposure of Rs5 lakh crore to entities connected with the coal sector and a chunk of them is already classified as bad loans or ‘non performing assets’.

Dr Singh often attributed his inaction to the compulsions of coalition politics, which were clearly more important than his oath of office as prime minister of India. It is hard to imagine that history will remember this kindly.
 A second blow to Dr Singh has been the embarrassment of being summoned by the special court under the Central Bureau of Investigation (CBI) this March. The case pertains to charges of corruption, breach of trust and criminal conspiracy in the award of a specific coal block to Hindalco, an Aditya Birla group company. Some commentators argue that this is the least controversial of the coal block allotments and that it will be difficult to make the charges stick. But, remember, court judgements are always about specific violations and not about the relative merits of a case in a milieu of exceptional corruption and arbitrariness.
 The Hindalco coal block allocation will be argued, decided and appealed, before a final conclusion is reached; but, even if the court verdict does not indict Dr Singh, history will have made up its mind long before then.
 As far as Dr Singh is concerned, the battle of public perception is already lost. This is evident in the stinging condemnation and lack of sympathy for the mild-mannered former prime minister on social media which is dominated by young Indians. In fact, simple demographics tell us why history will be particularly unkind to Dr Singh. Over 65% of Indians today are below the age of 35 which means that they were 10-year old or less when Dr Singh’s appointment as India’s finance minister in 1991 came like a breath of fresh air. They know Dr Singh only for his forgettable 10 years as prime minister and the repeated humiliation he has suffered from his ministers, bureaucrats and the Congress party.
 It is true that history will not be dictated by the views of 35-year olds; but let’s look at how history is already re-assessing the bouquets and brickbats for India’s economic liberalisation.
 To those of us who were already in the workforce in 1992, Dr Singh’s brilliant academic credentials and professional achievements held the promise of good governance, reform and development. India, then, was so much in awe of this mild-mannered, incorruptible man, who seemed set to deliver us from decades of humiliating shortages, low wages, high taxes, scarcity of basics like telephones, scooters and a cooking gas connection.
 India revelled in its new freedom. To Dr Singh went the entire credit for reforming capital markets, permitting foreign portfolio investment and unshackling business from the licence-permit-raj and restrictions on capacity expansion and foreign investment.
Many scandals plagued the Narasimha Rao government too; but none of them ever stuck to Dr Manmohan Singh. We continue to face the consequences of some of those disastrous policies even today. Consider this. India was the first country where public outrage at the gold-plated Enron power project at Dabhol led to its cancellation and unfortunate resurrection. An atrocious power policy and sanctioning of expensive independent power projects (many were cancelled), without fixing distribution issues, has ensured that most of India still reels from acute power shortages. The finance ministry and Dr Singh’s chosen bureaucrats and aides were in charge of clearances. There was a telecom licensing scandal too even in those days.
 The Harshad Mehta scam of 1992 exposed the lawlessness in the capital market which was then controlled by a cabal of brokers. They had their tentacles in public sector companies which handed over crores of rupees for ‘portfolio management’ based on political contacts and kickbacks.
 A consequence of the scam was that the capital market was made ready for foreign investors with automated, single-screen, paperless trading but it shut out retail investors. Large-scale loot of gullible investors was permitted in, what is now called, the ‘vanishing companies scam’ between 1992 and 1995. Under Dr Singh’s liberalisation programme, the office of the controller of capital issues (CCI) was scrapped allowing fly-by-night companies to rip off investors with fake claims and projects without any checks. That the retail investor is nearly extinct is hurting the government’s disinvestment programme even today.
 A series of independent regulators was set up under Dr Singh’s dispensation without any accountability towards investors, consumers or depositors who are their biggest stakeholders. This remains a problem too.
 None of this ever stuck to Dr Singh. Instead, the then prime minister, PV Narasimha Rao, took the blame for every scandal of that period, since he provided the political leadership. Indians of a certain vintage—mainly 50 years and above—continue to view Dr Singh with rose-tinted glasses and are saddened at his plight.
 Ironically, Dr Singh’s disastrous two-term stint as prime minister has led to a reassessment of PV Naramsimha Rao’s tenure, although he was reviled, humiliated and discredited by the Congress party itself. In fact, history is a lot kinder to Dr Narasimha Rao and has given him due credit as the reformer who ensured India avoided a sovereign default and gave a hard, if short-lived, push to economic liberalisation.
 Dr Manmohan Singh, on the other hand, had a God-given second opportunity to serve the nation as its prime minister for 10 long years. He sacrificed it all at the alter of coalition politics and presided over one of the most corrupt and draconian regimes that India has seen.
 The loot during his two terms extended from land grab (SEZs) to telecom spectrum, coal allocation, pricing of natural gas, the commonwealth games and the destruction of public sector undertakings in aviation and banking. Then there was the 2G scam, where it is clear that Dr Singh was fully informed about the dubious spectrum allocation at the cost of the national exchequer. He ignored written warnings by Union ministers like Kamal Nath.  In fact, the 2G-spectrum scandal unfolded in full public glare and was widely reported by the media, but Dr Singh did nothing.
 Shady chit funds and ponzi schemes thrived due to political patronage gobbling the hard-earned savings of the gullible; but the government watched in silence. Dr Singh did little even when scams like e-stamping were brought to his personal attention nor did he protect whistleblowers from the vendetta of those involved.
 Why would history be kinder to Dr Singh? Those of us, who still feel sorry for this weak but personally honest man, hope that his humiliation stops at a fair assessment of his tenure and he does not have to face the ignominy of a judicial indictment.

(Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at sucheta@moneylife.in)
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