Intentional prime minister

Manmohan Singh’s welfare policies as prime minister had a bigger impact on India’s economy than his dismantling of the licence raj as finance minister

-  K. SUNIL THOMAS

The gravest mistake people make while analysing Manmohan Singh's legacy is dwelling too much on his milestone achievement as an accidental finance minister, instead of his real contributions as an intentional prime minister.

This is the margdarshak who saved India from economic turmoil more than once. Singh, who once described himself as 'the Fagin of his peers, in a twist on Oliver Twist, did give India a lot more than just liberalisation.

Sure, the 'animal spirits' he unleashed with the 1991 reforms were epochal. By cutting red tape, removing government control on business and simplifying taxes, he created an atmosphere that soon made India the second fastest-growing major economy in the world. Gone was the 'Hindu rate of growth' India was often derided with (which never exceeded 3.5 per cent), with the nation notching up GDP growth rates of around 7 per cent in the 1990s and peaking at a scorching 9 per cent in the late 2000s. India and Indians had discovered the good life, the sort they thought existed only in countries across the seas.

India was on a roll under his watch. But there was a deep rumbling from out west.

The ominous sort only an economist-prime minister would have been prescient enough to see. An innocuous crash of the housing market in the faraway US was soon to have worldwide ramifications, and when Lehman Brothers, an American financial behemoth which had invested heavily in securities linked to mortgages, collapsed in September 2008, it was official-a global economic meltdown was underway. And India was not immune to it.

"During the global financial crisis of 2008, his astute management helped India weather the storm and remain relatively unscathed," said Sethurathnam Ravi, economist and former chairman of the Bombay Stock Exchange.